Work Through First Chicago Valuation

A startup has high uncertainty, limited financial history, and a wide range of possible exit outcomes. First Chicago method: model upside, base, and downside cases, then probability-weight the scenario values The common trap is presenting one precise valuation as if early-stage outcomes are narrow and predictable. A single case can hide the fact that most value may come from a low-probability upside case or that downside outcomes may be severe. Build upside case $120 million ARR times 10x exit multiple equals $1.2 billion; probability 20 percent. Upside should be ambitious but tied to a believable path, not pure hope. Build…

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