Valuing a startup is tricky, especially when it hasn’t earned a cent. There are no profits. No customers. No track record.
But that doesn’t mean you avoid valuation. In fact, getting it right at the beginning might be the most important step of all.
In this article, I’ll walk you through how we valued Dalmilling Capital, a holding company we’ve been building from the ground up. We’ll cover:
- How we decided on share count and price
- The exact method and formulas we used
- What the valuation tells us going forward
Step 1: Set a Philosophy Before Setting a Price
Before touching a spreadsheet, we made a philosophical decision:
We would not value our company based on potential.
Why?
Because most early-stage valuations are inflated, using projections that rarely materialise. That’s not how we should operate, and it’s not how we want to think.
So instead, we anchored our valuation in tangible contributions, the capital that had actually been raised and was sitting in the bank.
Step 2: Start With Book Value
Our actual cash raised:
$1,000
That became our initial book value.
No goodwill. No intangibles. No IP premiums. Just clean, contributed capital.
We then divided the company into 10,000 shares, which made the per-share value:Share Price=1,00010,000=$0.10 per shareShare Price=10,0001,000=$0.10 per share
This gave us a clear and simple cap table:
| Shareholder | Shares Held | Ownership % | Contribution |
|---|---|---|---|
| Founder | 10,000 | 100% | $1,000 |
It’s not complex and that’s the point. Anyone looking at this can understand where the number comes from.
Why 10,000 Shares?
We picked 10,000 shares for simplicity. It creates a nice balance:
- Small enough to keep it human
- Large enough to allow for fractional ownership later
- Easy mental math: every share = 0.01% of the company
You could use 1,000 or 100,000. What matters is consistency and clarity.
Step 3: Build Value Through Operations, Not Assumptions
At this point, the valuation is not based on revenue or earnings. It’s purely equity-based.
That means our future growth in valuation will have to come from:
- Deploying capital into high-quality public equities
- Later, acquiring or investing in small businesses with strong cash flow
- Retained earnings and reinvestment.
We won’t revalue the company until we’ve earned a revaluation.
Intrinsic Value Model (Once We Have Cash Flows)
Eventually, as Dalmilling begins generating cash flow, we’ll use a Discounted Cash Flow (DCF) model just as we would do for our portfolio companies.
Here’s a preview of what that would look like:
Intrinsic Value = ∑ (FCFt / (1 + r)^t) + (Terminal Value / (1 + r)^n)
Where:
- FCF = Free Cash Flow
- r = Discount rate (e.g., 10%)
- n = Final year in model (e.g., 5)
- Terminal Value = FCF in year 5 × (1 + g) / (r – g)
But again that only comes into play when we’re a real operating business with cash flow.
Summary of Our Startup Valuation
| Metric | Value |
|---|---|
| Capital Raised | $1,000 |
| Number of Shares | 10,000 |
| Price per Share | $0.10 |
| Book Value | $1,000 |
| Intrinsic Value | TBD |
| Revaluation Conditions | Only after earnings or acquisitions |
We want each dollar of shareholder capital to feel sacred. That means no games, no hype, no inflated dreams.
It’s a slow path. But it’s one we trust.
Dalmilling Capital 
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