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.
PPS = Post-$ Valuation / Post-$ Fully Diluted Capitalization
PPS = 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-$ by the Series B Pre-$ to get the increase in valuation. But they almost never are the same. Here are a couple of reasons why:
- The Series B pre-$ fully diluted typically includes a 10-20% post-$ available stock plan. This is mostly due to convention.
- The pre-$ fully diluted will often 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.
The value of your position will also be affected by carried interest and any fees paid in connection with the investment.