Your company’s valuation is the estimated worth of your company at a particular point of time. More importantly, it serves as the basis of the estimated value of the equity rewards earned by your team.
To set your company’s present valuation, go to Capitalization > Valuation > Add new valuation
In the Valuation ($) field, you can indicate the current estimate of your company’s valuation and the date the valuation was made in the From field.
Next, select the Source or basis of the valuation. There are five (5) choices here that you can choose to justify the valuation figure you arrived at:
This valuation is the founder's best guess of the company’s worth based on factors such as the amount already invested in building the company and the founder’s personal estimate of its potential for growth and revenue.
This valuation is supported by an early-stage investment round (or multiple rounds) with participants such as family and close friends, or with angel investors and small venture capital firms. This post-money valuation is generally based on the deal terms of the round.
This valuation is supported by a later investment round (or multiple rounds) participated by more well-established investors such as large venture capital firms. This post-money valuation is generally based on the deal terms of the round.
Professional Valuation (409a, etc.)
This valuation was performed by an independent third-party auditor.
Fair market Value
This is the company’s estimated worth as determined by the market.