How are valuations determined for AngelList advised funds?

Note: LP valuations are generally locked or unlocked at the discretion of a fund lead. When reported, valuations are generally delayed by 90 days. You can read more about this here.

Investments on AngelList are valued using industry-standard conventions according to ASC 820.

For early-stage companies, valuations are usually marked up or down to the price paid in a company's latest priced financing round. These prices are reported by portfolio companies, the fund lead, or other investors. 

Companies that have not received investments in a priced round since the last valuation are typically held at the last valuation or are marked down according to our valuation policy. Our valuation policy generally calls for marking an early-stage investment to $0 upon news of impairment or a significant pivot.*

In some cases, investments are sent to third-party valuation providers to determine a fair market valuation. This is typically done for larger, late-stage investments and investments where standard valuation methodologies are unlikely to capture the investment's fair market value.

Our valuations often do not account for liquidation preferences and other non-financial terms that may affect returns. While AngelList’s valuation sources are believed to be reliable, we do not undertake to verify the accuracy of such valuations.

*Consistent with early stage valuation methodologies, our valuation policy calls for marking companies to $0 in a number of cases in which the company may still be alive and kicking (and even doing well from many perspectives).

The most common example of this is where the company undergoes a substantial pivot in their business strategy or focus: in that context, our policy typically requires the company's valuation to be marked to $0 until a subsequent third party financing occurs following the pivot.

In other cases, we may receive news of potential impairment (negative news regarding the company's progress or an inability to contact the company or confirm its ongoing activity). In these cases, our policy generally calls for marking to $0 until a subsequent third party financing or exit event.

The fact that we have marked a valuation to $0 does not mean that the investment has been deemed entirely worthless or written off for tax purposes. In many cases we will re-value the investment when the company raises its next round of financing.

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