Comparable Transactions

How It Works

Comparable Transactions values your startup based on what similar companies in your sector and geography actually raised or sold for. First, identify recent transactions (funding rounds or acquisitions) involving companies at a similar stage, in a similar sector, and crucially in the same European geographic tier. Then calculate relevant multiples from these transactions (e.g., valuation-to-revenue, valuation-to-users). Apply these multiples to your startup's metrics to derive a valuation range. Finally, apply any applicable premiums for credibility signals like accelerator participation, grants, or notable investor backing.

When It's Useful

Use Comparable Transactions from seed through Series B when you can find recent, relevant deal data from your sector and European tier. It is one of the most credible methods because it is grounded in actual market prices rather than theoretical models. It works best when there is a healthy deal flow in your sector — SaaS, fintech, and marketplace startups typically have the most comparable data available. The method requires access to deal databases or public funding announcements and honest assessment of comparability.

European Context

Comparable Transactions is one of the most geography-sensitive methods because valid comparisons must come from the same regional tier within Europe's 5-tier system. Cross-tier comparisons are flagged as unreliable — a Tier 1 London deal cannot be compared to a Tier 4 Bucharest deal. The method applies premiums for specific European credibility signals: top EU accelerator participation adds a 1.20x premium, EIC grant receipt adds 1.15x, backing by a Tier 1 EU VC adds 1.18x, and — notably — US VC backing of a European startup adds 1.30x, reflecting the signal value of cross-Atlantic interest. These premiums ensure comparisons account for the deal-quality signals that matter in European markets.

Key Parameters

Example

A Tier 2 seed-stage fintech startup finds 5 comparable Tier 2 seed fintech deals from the last 18 months with a median valuation of EUR 3.2M. The startup participated in a top EU accelerator (1.20x premium) and received an EIC grant (1.15x premium). Adjusted valuation = EUR 3.2M × 1.20 × 1.15 = EUR 4,416,000.