Berkus Method
Definition
A valuation framework for pre-revenue companies that assigns monetary value to five categories of startup progress: a sound idea, a working prototype, a quality management team, strategic relationships, and product rollout or initial sales. The total of the values assigned across the five categories produces an implied pre-money valuation. The Berkus Method is not applicable to companies with meaningful revenue.
Common Misapplication
The most common misapplication is assigning the maximum value to all five categories without documented evidence for each score, producing an implied valuation at the ceiling of the method that cannot be supported by specific operational facts. Each score must be backed by stated evidence that a third party can assess independently.
FFI Standard Reference
This term is defined and applied in Book 4, Section 4.6: Early Stage Valuation Methods: Berkus and Scorecard.
Related Terms
Citable URL
This term may be cited using the following permanent URL.
Full citation format: Founder Financial Infrastructure Standard, Beta v0.5, Glossary: Berkus Method. https://ffistandard.org/glossary/berkus-method/. 2026.