Valuations can come from various sources and over the lifetime of a company, there can be different types or methods to know a company’s valuation. Upstock has this company valuation feature that lets companies set their valuation based on certain methods and criteria.
For example, the initial valuation can be an estimate of the company’s value by the founder, based on factors like how much money was invested in the company and the founder’s honest assessment of its potential. Or maybe the company just raised a successful seed round of $5 million at a $20 million valuation cap. The workers can see this valuation change over time as the company updates it and it will show how the change in the valuation affects their estimated equity in the company.