Cost-to-Duplicate
See how Cost-to-Duplicate estimates European startup value based on replacement costs for IP, code, data, and regulatory approvals.
How It Works
Cost-to-Duplicate estimates what it would cost to rebuild your startup from scratch. It sums the replacement costs of all tangible and intangible assets: engineering time (developer salaries × months), intellectual property (patents, algorithms, proprietary data), physical assets, regulatory approvals and certifications, and any other assets that contribute to your competitive position. The total replacement cost establishes a valuation floor — your startup is worth at least what it would cost a competitor to replicate everything you have built.
When It's Useful
Use Cost-to-Duplicate at the pre-seed or seed stage when your primary value lies in what you have built — code, IP, data assets, or regulatory approvals — rather than in revenue or growth metrics. It is especially valuable for deeptech startups, companies with significant engineering investment, or those in regulated industries where compliance represents a real barrier. It works well as a valuation floor but may undervalue startups with strong teams, market positioning, or network effects that are hard to quantify as replacement costs.
European Context
Cost-to-Duplicate is significantly impacted by European geography because labour costs — the largest component — vary dramatically across tiers. A senior engineer costs approximately EUR 120K per year in Tier 1 markets (London, Berlin, Paris) but EUR 45K in Tier 4 and EUR 30K in Tier 5 markets. The method also applies a 1.5x regulatory approval premium for startups that have obtained European regulatory compliance (GDPR readiness, AI Act compliance, MDR for medical devices), reflecting the significant time and cost investment in navigating Europe's complex regulatory landscape. This makes the method particularly relevant for deeptech and regulated-industry startups where regulatory moats create real value.
Key Parameters
EUR 120,000/year
EUR 45,000/year
EUR 30,000/year
1.5x for GDPR/AI Act/MDR
Example
A Tier 3 pre-seed healthtech startup. Engineering: 3 engineers × EUR 65K × 1.5 years = EUR 292K. Proprietary dataset: EUR 150K to recreate. MDR regulatory filings: EUR 80K × 1.5x premium = EUR 120K. Patents pending: EUR 50K. Total Cost-to-Duplicate = EUR 292K + EUR 150K + EUR 120K + EUR 50K = EUR 612,000.