Bridging Valuation Gaps with DCF modeling in Fundraising
Bridging Valuation Gaps with DCF modeling in Fundraising By: Nitin Kumar April 1, 2026 Share: Valuation is one of the most contentious areas in fundraising in the current capital markets. As startups and growth-stage companies look to raise capital, the gap between their internal assessment of their business value and investors’ willingness to pay for it has grown significantly. Valuation Surge Amid Selective Deal Activity According to data from PitchBook, the median valuations for startups have fallen by 15-25% across various stages from 2022 to 2024. This is a correction after the peak funding environment in 2021. However, the gap in valuations is a result of founders’ high valuations, especially for earlier-stage companies. The gap in valuations is not just a result of over- or under-optimism. There is a fundamental difference in approach. Founders focus on potential, while investors focus on returns. In this conte...