Companies are valued with industry-standard methods in accordance with ASC 820.
For early-stage companies, valuations are generally marked up or down to a company's latest priced financing round, as disclosed to us by portfolio companies or other investors. While AngelList’s valuation sources are believed to be reliable, we do not undertake to verify the accuracy of such valuations.
Companies that have not received investments in a priced round since the last mark are typically held at the last mark or marked down at our discretion according to our valuation policy. Our valuation policy typically calls for marking an investment to zero upon news of impairment or a significant pivot.
Our valuations often do not account for liquidation preferences and other non-financial terms that may affect returns. In certain cases, investments are sent to third-party valuation providers to determine fair market valuation. This is typically done for large, late-stage investments and investments where standard valuation methodologies are unlikely to capture the investment's fair market value.
Our valuation policy generally only provides for valuation mark ups in connection with priced sales of company equity, such as at a Series A or later financing.
Valuations reported in the news are often based on a variety of sources - sometimes credible, sometimes not. The valuation listed on the dashboard is based on AngelList’s valuation policy and information available to it.
When a company exits, the acquiror usually holds back some portion of the purchase price in order to satisfy contingencies. The most common examples of this are indemnification escrows and milestone-based payments. These portions of the exit consideration are typically realized over several years following the exit. There may also be stock of a private company acquiror received in an exit, which may remain unrealized for many years.
Our valuations are generally based on the price per share paid in a round. This is because you can't accurately assess the change in value of a position based solely on the post and the pre-$ valuations.
Here is an illustration of why, using an investment made at a Series A and valued after the Series B:
Series A Price Per Share = Series A Post-$ Valuation / Post-$ Fully Diluted Capitalization
Series B Price Per Share = Series B Pre-$ Valuation / Pre-$ Money Fully-Diluted Capitalization
If the Series A Post-$ fully diluted was the same as the Series B pre-$ fully diluted, then you could simply divide the Series A Post-$ Valuation by the Series B Pre-$ Valuation to arrive at the increase in valuation. But practically they almost never are the same. Here are several reasons why:
• The Series B pre-$ fully diluted number typically includes a 10-20% post-$ available stock plan. This is mostly due to convention.
• The Series B pre-$ fully diluted will sometimes include convertible notes or SAFEs issued in between the two rounds.
• If additional Series A shares were sold in the interim, or the company increased the existing stock plan in the interim, the Series B pre-$ fully diluted would be bigger.
Note that the value of your position in an AngelList fund or SPV will also be affected by carried interest and any fees paid in connection with the investment.
If you have transferred your interest for estate planning or due to other legal obligations, the reporting for that investment is slightly more complicated. If the entity you transferred the investment to is an entity associated with your same AngelList account, you will see the value reporting listed on your dashboard with the new transferee account listed under the entity column. Generally, the Invested ($) will show as $0 for any interest that has been transferred. The proportional amount transferred will be listed under "Invested ($)" for any transferee entity associated with your AngelList account. In the event that the event had realized distributions prior to transfer, those distributions will generally be listed under the original investment entity which received the distribution.