We’re committed to continuously improving how our platform values startups, especially the most challenging cases: novel technologies or business models, where the knowledge-gap between founders and investors may be the hardest to bridge.

With this update, we’re expanding the lens through which we understand startups by introducing a new question that captures the defining attributes of a company’s technology, business model, or structural focus.

Categorizing companies is rarely simple—especially for startups that may be pioneering entirely new markets. A number of classification systems have been established by institutions, platforms, or governments, often tailored to their specific goals. At Equidam, we adopted the TRBC (The Refinitiv Business Classification) system to define industry because of its customer-focused perspective: it classifies companies based on who their customer is and what problem is being solved. This allows us to compare companies offering substitutable solutions (and thus sharing the same market risk/potential), even if their internal technology or structure differs widely.

In contrast, the language used in the startup ecosystem is often shaped by buzzwords—terms like Fintech, SaaS, Web3, and Deep Tech. These are popular and recognizable, which is useful, but also ambiguous: Are they industries? Business models? Technologies? Labels?

Most importantly: where do these terms fit into startup valuation?

To bridge this divide and enhance the precision of our methodology, we’re introducing a new layer to our platform: a framework for company categories. While industry continues to represent the demand side—who the customer is and what they want—company category introduces the supply side: how the company is structured, what technology it leverages, and how it delivers its value.

For now, this update serves a data collection purpose only. It does not affect valuations, but it opens the door to deeper analysis and future refinement of our methods. Our aim is to build a more grounded and useful framework for classifying companies—one that supports richer insight, sharper benchmarks, and eventually, more nuanced valuation models. This framework is open for feedback and will evolve as we explore the real impact of innovation on startup outcomes.

Short, Medium, and Long-Term Objectives

This addition to the Equidam platform has been carefully designed to serve a set of strategic objectives over time. While it may not influence valuation today, it is a foundational step in building a more comprehensive understanding of how innovation affects startup success — maintaining our position as the state-of-the-art for startup valuation.

1) Short-Term: Enriching Our Data

In the short term, this feature is purely exploratory. Our immediate objective is to collect structured, high-quality data about the types of technologies, business models, and structural characteristics startups are using today.

  • Better understand emerging trends across the startup ecosystem
  • Build internal datasets for research and testing
  • Contextualize valuations with additional qualitative insight

At this stage, there is no impact on the valuation itself, and the information is not used in any calculations. It is purely informative—for both our team and the founders using the platform.

2) Medium-Term: Enhancing Benchmarking and Comparables

As we collect more data, we expect to use these new company categories to improve benchmarking capabilities across the platform.

  • Grouping similar companies more effectively for valuation comparables
  • Offering more tailored performance benchmarks by business model or technology
  • Helping founders position themselves more precisely relative to peers

For example, if you’re building an open-source API platform, it will become easier to understand how similar companies are performing, what valuation ranges they’ve achieved, and how your projections compare. This adds granularity and personalization to the benchmarking process, helping founders build stronger, more credible fundraising narratives.

3) Long-Term: Informing Future Valuation Methodology

In the long term, if we observe consistent, measurable patterns between certain company categories and valuation outcomes—and if those patterns are supported by theoretical justification and empirical data—then we may explore integrating them into the core startup valuation methodology.

Any such integration would follow Equidam’s rigorous standards for:

  • Theoretical soundness: Aligning with economic and financial theory
  • Data-backed validation: Proven through statistically significant patterns
  • Transparency: Clearly documented and communicated to users

We see this as part of our larger mission to ensure our valuation platform remains at the forefront of practical, transparent, and adaptive valuation thinking—particularly as the startup landscape continues to evolve and innovate.

Industry vs. Category

Our platform has always emphasized industry selection as a fundamental component of valuation. Now, we’re adding company categorization to provide additional context. It’s important to understand the distinct perspectives these two elements represent:

Industry Selection (Customer Perspective)

  • Focuses on what consumers are seeking to purchase or what problems they’re looking to solve
  • Directly impacts risk factors and growth potential
  • Provides insight into market dynamics that clearly influence valuation

Company Categories (Company Perspective)

  • Examines the business model, technology utilized, or company type
  • Represents how a company creates its product or delivers its service
  • Currently has a less obvious direct impact on valuation metrics

This distinction is crucial for accurate valuation. Consider these examples:

  • An AI startup targeting logistics is primarily influenced by logistics industry risks (like supply chain disruptions), not AI industry developments.
  • A blockchain solution for asset management faces growth potential and risk factors determined by the asset management industry, not blockchain trends.
  • A drone delivery service for groceries is more affected by fresh produce industry dynamics than drone technology advancements.

Historically, the technology or business model aspects of a company have been reflected in its financial projections. For instance, innovative technology might enable faster growth, lower operational costs, or reduced customer churn—all of which appear in projections rather than separate valuation adjustments.

Implementing Company Categories

As of now, Equidam users will find a new question in the platform: “Which category best describes your product or service?” This is a non-mandatory field that collects structured data on the defining features a startup.

These categories have been adapted from Y Combinator’s startup classification categories, with some modifications to ensure clarity and avoid duplication with our industry database. For instance, we removed overlapping, ambiguous, or outdated tags like “video,” “sales,” and “e-learning.” We also eliminated too-narrow categories such as “DevSecOps.”

You can view the full list of categories in our helpdesk article: Which company category should I select?

By incorporating this new dimension into our platform, we’re enhancing our ability to provide nuanced, accurate valuations for innovative companies. While industry selection remains the primary valuation driver, this additional perspective will ultimately help us deliver even more precise insights for both entrepreneurs and investors.

As always, we welcome your feedback on this feature as we continue to improve the Equidam platform.