Probability-Weighted Scenario Value

Calculates a startup’s expected value as the probability-weighted sum of failure, downside, base, and upside outcomes, with failure explicitly included at its own value. Inputs are a value and a probability for each of the four scenarios.

By Devon Coombs, CPA, MBA · Teaching Professor of Finance, Santa Clara University · Reviewed August 2026

From the author: Devon Coombs, CPA, MBA teaches finance at Santa Clara University and works with corporate teams on practical AI.

AI training for finance teams · Consulting · The 10 Laws of Finance

Interactive Tool

Probability-Weighted Scenario Value

Failure value

Failure prob.

Downside value

Downside prob.

Base value

Base prob.

Upside value

Upside prob.

Expected value

$45.25M

Σ probability × scenario value

Probabilities sum

100%

weights are valid

Base-case contribution

$17.50M

prob × base value

The expected value weights each future by its probability, including failure at $0, which a single-point forecast hides. Compare it against the VC-method price: a large gap means the probabilities or the exit assumptions deserve scrutiny.

Learn the concept

This calculator comes from the free Entrepreneurial Finance course, where the concept is taught with readings, worked examples, and practice questions.

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Built by Devon Coombs, CPA, MBA, Teaching Professor of Finance at Santa Clara University.