- Value your investments at your cost.
- If a financing happens at an increased valuation and is led by a new investor, write your investment up to the new price per share.
- If a financing happens at a decreased valuation regardless of whether or not there is a new investor, write your investment down to the new price per share.
- If bad things are happening, you can take a discretionary write down based on your best judgement.
- If good things are happening, you should not take a discretionary write up. Only write things up in case #2.
- If the company is public, use the publicly traded price but discount it due to illiquidity (usually 25%).
Friday, June 27, 2008
Startup Valuation Via Brad Feld
Brad's 1,2,3 . . . description of valuing startups is particularly clear and succinct:
Posted by Mathew Johnson at 2:33 PM