Rōvn DCF Valuation: Defending the $15M Pre-Seed Post-Money Cap

Date: 2026-05-14 · rebuilt 2026-05-28 to reconcile to the corrected 3-case model Method: Y5 ARR × exit multiple, discounted to present at a risk-adjusted rate. Purpose: Show the Series A path that supports the $15M post-moneyPost-money capRōvn SAFE term sheet · 2026-05 · post-money cap (see 02.4 DCF Valuation) pre-seedRound stage02.1 Use of Funds · pre-seed $2.25M raise cap. Raise: $2.25MRound sizeRōvn SAFE term sheet · 2026-05 · canonical raise (see 02.1 Use of Funds) on a $15M post-money SAFERound structureRōvn SAFE term sheet · 2026-05 · $2.25M / $15M post-money cap (hard cap $2.75M only if demand).

Source of truth. All Y5 ARR figures below match 3_CASE_MODEL_SUMMARY.md (rebuild 2026-05-26): Bear $30M / Base $45M / Bull $60M. The prior draft of this page ran a retired $25M / $75M / $180M model ("$84.3M", "~2,330 logos") that predated confirmed pricing; it is fully superseded here. All Y5 ARR figures are projections / modeling assumptions, not actuals. Rōvn is pre-launchStage03.1 Company Overview · pre-launch by design, zero paying customers, zero signed pilots or design partners with zero revenue, zero paying customers, and zero signed LOIs.

1. Inputs (from ROVN_3CASE_MODEL.xlsx and 3_CASE_MODEL_SUMMARY.md: projections, not actuals)

Discount rate basis. 30% is the midpoint-to-upper end of the standard pre-revenue, seed-stage venture discount band (25-35%) used for companies with no recurring revenue and unproven go-to-market. This band reflects the empirical return hurdle seed investors price for ~10x target multiples on survivors net of a high failure rate (see e.g. Damodaran's venture-capital cost-of-capital tables and standard early-stage practitioner ranges). We hold the rate flat at 30% across all three cases, the scenario risk is expressed in the ARR and exit-multiple spread, not by flattering the bull case with a lower rate. A more punitive 35% sensitivity is shown in §9.

Exit multiple basis. Tied directly to COMP_MULTIPLES.md: the healthcare-credentialing / provider-data-platform comp band clears ~8-12x forward ARR at growth stage (Medallion, CertifyOS/Certify, Andros, Verifiable). We anchor Base at the conservative bottom of that band (8x), Bear at a staffing-marketplace-style 6x (multiple compression scenario), and Bull at 10x. We deliberately do not model the 25-45x identity-infra band (Persona, Plaid) as the base, that is upside framing, not the anchor.

2. Industry-Standard ARR Multiples (summary; full sourcing in COMP_MULTIPLES.md)

Rōvn argues for the credentialing-platform band (8-12x at Series A), not the staffing-marketplace floor and not the identity-infra ceiling, because of recurring facility-workflow revenue, the Verified API tier, the cached-replay margin curve, and the worker-owned network. Conservative Series A multiple: 8x. Base assumption: 8x. Bull: 10x.

3. DCF Build: Base Case (projection)

Y5 ARR (Base, projected)     = $45M
Exit multiple                = 8x
Y5 enterprise value          = $45M × 8 = $360M
Discount rate                = 30%
Years discounted             = 5
Discount factor (1.30)^5     = 3.713
Present value today          = $360M / 3.713 = $97.0M

Sanity checks on the Base PV ($97M):

• At a 6x multiple (multiple-compression downside on the Base ARR): Y5 EV = $270M → PV today = $72.7M.
• At a 10x multiple (Bull multiple on Base ARR): Y5 EV = $450M → PV today = $121.2M.

Base-case justifiable present value today: ~$97M (8x), bracketed ~$73M-$121M for 6x-10x on the $45M Base ARR.

The $15M post-moneyPost-money capRōvn SAFE term sheet · 2026-05 · post-money cap (see 02.4 DCF Valuation) pre-seedRound stage02.1 Use of Funds · pre-seed $2.25M raise cap is ~15.5% of the Base-case fully-discounted PV (~$97M). Standard healthcare/infra seed dilution is 15-25%, so a $15M cap on ~$97M of risk-adjusted Base PV sits right inside convention, neither a giveaway nor a stretch.

Against the Bear-case PV (~$48.5M), the $15M cap is ~30.9%, still inside the healthcare-vertical seed comp range and keeps pre-seedRound stage02.1 Use of Funds · pre-seed $2.25M raise investors whole even on a 6x downside multiple.

4. Series A Bridge: ~18 Months from Today

Series A math (ties to the corrected Y2 Base ARR of ~$2.4M):

• Target Y2 ARR exit = $1.5-2.5M (Base trajectory ~$2.4M).
• Series A multiple = 10-14x (healthcare-infra, growth).
• Implied valuation = $20-45M post-money.
• Founder dilution at $8-10M raise / $35-45M post ≈ 20-25%.

This means pre-seedRound stage02.1 Use of Funds · pre-seed $2.25M raise investors at the $15M cap participate in a ~2-3x markup at Series A on the Base path (target Series A post-money $30-50M). Standard for top-quartile pre-seedRound stage02.1 Use of Funds · pre-seed $2.25M raise → Series A graduates. Series A figures are projections.

5. Sensitivity Table: Series A Post-Money

Bear path: Y2 ARR $1M × 10x = $10M (down round vs $15M cap, founder extends runway or accepts a flat/down round). Base path: Y2 ARR ~$2.4M × 12x = ~$29M (~1.9x markup from $15M cap). Bull path: Y2 ARR $3M × 14x = ~$42M (~2.8x markup, best case for pre-seedRound stage02.1 Use of Funds · pre-seed $2.25M raise investors).

The $15M cap is supported by the Base-case projection. Pre-seed investors face moderate downside (a flat/down round in bear) and a meaningful ~2-3x markup on the Base path. The cap remains conservative against the ~$97M Base PV (~15.5%) and clears the bear PV bar (~30.9% of $48.5M). All ARR figures are projected, not actual.

6. Comparison to Direct Comps at Equivalent Stage

Rōvn at $15M post-moneyPost-money capRōvn SAFE term sheet · 2026-05 · post-money cap (see 02.4 DCF Valuation) ($2.25MRound sizeRōvn SAFE term sheet · 2026-05 · canonical raise (see 02.1 Use of Funds) raise, $2.75M hard cap if demand) is inside the upper range of comparable infra/credentialing seeds. A working product build + HIPAA-alignedHIPAA posture06.2 HIPAA Posture Memo · canonical procurement-safe phrasing (not 'compliant' / not 'certified') engineering chassis + DCF anchor justify a seed cap at the top of the credentialing band, well below the identity-infra trajectories (Persona, Plaid) that these comps later reached.

7. Downside Case Defense

If the Bear case materializes (Y5 = $30M ARR):

• 6x exit multiple = $180M EV
• 30% discount × 5 years → factor 3.713
• PV today = $180M / 3.713 = $48.5M

Pre-seed cap at $15M = ~30.9% of Bear-case PV ($48.5M). Investor return in the bear scenario:

• $2.25MRound sizeRōvn SAFE term sheet · 2026-05 · canonical raise (see 02.1 Use of Funds) total raise at 15% of equity → ~15% × $48.5M = ~$7.3M back at Bear PV = ~3.2x on the bear case alone.
• A $600K check at 4% → ~$1.9M back at Bear PV = ~3.2x on bear.

The downside protection is the core defense of the $15M cap, supplemented by the working product build, the HIPAA-alignedHIPAA posture06.2 HIPAA Posture Memo · canonical procurement-safe phrasing (not 'compliant' / not 'certified') engineering-partner chassis (compliance posture ahead of a from-scratch competitor), and one confirmed clinical advisor (additional advisor seats in progress). Even if the company underdelivers to the Bear line, pre-seedRound stage02.1 Use of Funds · pre-seed $2.25M raise investors see capital preservation plus modest upside, not zero. Pre-launch caveat: zero revenue and zero customers today; the bear case is still a projection, not a floor guarantee.

8. Summary

Weighted expected value (30% Bear / 50% Base / 20% Bull):

0.30 × $48.5M + 0.50 × $97.0M + 0.20 × $161.6M = ~$95.3M expected PV

Pre-seed investor at the $15M post-moneyPost-money capRōvn SAFE term sheet · 2026-05 · post-money cap (see 02.4 DCF Valuation) cap ($600K check, 4% of equity) expected return:

$600K → 4% × $95.3M = ~$3.8M expected (~6.4x)

Pre-seed investor at the $15M cap on the full $2.25MRound sizeRōvn SAFE term sheet · 2026-05 · canonical raise (see 02.1 Use of Funds) raise (15% of equity):

$2.25M → 15% × $95.3M = ~$14.3M expected (~6.4x)

Defensible. The $15M cap is ~15.5% of the Base-case PV, provides meaningful upside in the bull case, and protects the downside in the bear case (~30.9% of $48.5M Bear PV, within the healthcare-vertical seed comp range). All Y5 ARR figures are projections, not actuals.

9. Caveats

• Discount rate is the single biggest sensitivity. At a more punitive 35% rate, Base PV today drops to ~$80.3M and the $15M cap rises to ~18.7% of Base PV, still inside seed convention.
• Multiple compression: if the healthcare-SaaS market re-rates downward, Series A multiples could compress to 6-8x; the Base case is already anchored at the conservative 8x to absorb this.
• Platform deal execution risk: the Bull case depends on 1+ enterprise Platform contract by Y3.
• Pre-launch: zero revenue, zero customers, zero LOIs. Every case is a projection.

under counsel review: Update the discount rate quarterly based on Series A comp transactions. under counsel review: If Series A market multiples drop below 8x for healthcare infra, re-anchor the exit multiple downward and re-run the DCF.

End of DCF defense.