Holding valuation

1. What is valued

A holding is one position your organisation has in an asset or a company. It is prospective while a deal is open, held once it is recorded as held, and later exited or withdrawn. Only held holdings are valued. Any other holding reads "Only held holdings are valued" and is left out of totals.

Each holding has one valuation method. Its kind lists the methods it allows and a default, which the user can change:

A method the application does not recognise reads "This valuation method is not available yet" rather than a guessed value.

2. The five methods

The asset's value is the one the asset pages show: the newest included base-case scenario of each included indication plan, added together only when they share one basis. Two or more whose basis is unknown are not added, because their bases cannot be shown to match. With no plan included, it is the asset's newest base-case scenario. Share of asset value and the look-through estimate use an asset's value only when its basis is full ownership. A scenario's basis comes from its deal structure; a scenario that declares full ownership but whose result was computed as a deal reads "Basis unknown".

A scenario for a license or a royalty must model that position. A kind that cannot hold a share of the whole asset (license in, license out and royalty) is not valued from a scenario on the full-ownership basis, or one whose basis is unknown: it reads "The scenario values the whole asset, not this position". A scenario's value is its value as computed. A deal scenario counts the upfront payment in full at the valuation date, so money already received and recorded in the ledger is also inside the scenario's value; the two are shown separately and never added.

Cost reads the holding's ledger rows, leaving out voided rows. Funding and fees make up cost; commitments are promises to pay and receipts are money back, so neither changes it. Write-downs are taken from cost in the same currency. Each currency gives its own amount, and currencies are never converted. A currency whose write-downs exceed its cost makes the whole holding not valued, rather than showing a negative cost.

3. Reasons a holding is not valued

A holding that cannot be valued shows one of these reasons, and is never shown as zero. The asset reasons also mark each of a company's assets that a look-through estimate could not add (§5).

4. Completeness and totals

A value is complete or partial. Scenario and cost values are complete. A share of asset value is partial when the asset's value is partial, meaning some of its included indication plans have no computed base case. A look-through estimate is partial when any of the company's assets has a partial value or could not be added (§5).

Totals follow these rules:

• Only held holdings count.
• Values are added only within one basis and one currency. Different bases are shown side by side and never added; currencies are never converted.
• A held holding that cannot be valued is counted as not valued and never added as zero. A basis with no valued holding is not shown, rather than shown as zero.
• Partial values are added and counted, so each total says how many of its holdings are partial.
• Look-through estimates are left out by default and counted separately. When a user includes them, they form their own group and are never added to another basis.

5. The look-through estimate

The look-through estimate values an equity holding in a company from the assets that company holds. It exists because a private company's own share price is rarely known, while its assets may already be valued in the workspace.

Which assets count. The assets the company currently owns or sponsors in your workspace: a current-owner or sponsor role that has not ended or been removed. Each asset counts once, even when the company holds both roles. An asset can count in more than one company's estimate: it can have several current owners as well as a sponsor, and each of them counts it in full.

Each asset. A complete full-ownership value is added. A partial full-ownership value is added and counted as partial. An asset with no value, a value that is not a number, a value on another basis, or an asset that has been archived is listed with its reason and not added.

The value is the holding's ownership share of the sum, in USD. An asset's rNPV can be negative, so the estimate can be negative too. The ownership share is the organisation's total share in the company: a later round in the same company adds its commitment and funding to the existing holding, and the user can update the share there, rather than recording a second holding. A company page warns when two held holdings of the same kind name that company, because both would count its assets.

Wherever a holding's estimate is shown, it is labelled "Estimate, not an equity valuation", "Ignores cash, debt, preferences and dilution" and "Ignores license payments the company owes", and each of the company's assets is listed with whether it was added. Estimates a user includes in totals are marked as estimates there.

What it ignores. The estimate is not a price for the company's shares. It leaves out:

• the company's cash and debt;
• liquidation preferences and other rights attached to share classes;
• dilution from later rounds, options or convertible instruments, unless the user updates the ownership share;
• corporate costs that are not part of any asset's scenario;
• rights the company has licensed to others: an asset it has licensed out still counts at its full-ownership value;
• payments the company owes under licenses it has taken: an asset it has licensed in, for example from the institution a spin-out came from, still counts at its full-ownership value, with no deduction for the upfront, milestone or royalty payments the company makes for it. The estimate is therefore higher for a company that licenses its assets in, as many spin-outs do;
• rights limited to some territories: an asset the company holds only in some territories still counts at its worldwide full-ownership value;
• assets the company holds without a current-owner or sponsor role, and the company's own holdings in other companies (it looks through one level only).

A licensor that also holds equity. When your organisation licensed an asset to the company and also holds its equity, as a technology-transfer office often does after a spin-out, your royalty and milestones are also inside the estimate, at your ownership share, because the company's asset is counted at its full value. Read the estimate and your royalty holding separately; do not add them.

Round figures shown beside it. When the holding was recorded from an agreed equity purchase, the panel also shows the pre-money valuation recorded on that term, and an implied post-money: the purchase amount divided by the share bought in that round. That share is the first equity issuance share in the agreed terms, or else the share recorded when the holding was created, while neither a later round nor an edit has changed it; otherwise no implied post-money is shown. The purchase amount leaves out the round's tranches. These figures stay in the term's own currency beside the estimate, and are never converted or compared with it.

6. Where the ledger figures come from

Ledger rows are the user's record of what was committed, paid, received and written down. When an equity deal closes, the confirmation step prefills rows from the deal's newest agreed terms, and the user can change or leave out any of them before anything is recorded:

• For each equity purchase, a commitment and a funding row for its amount, which is what is paid at closing.
• For each tranche, a commitment for its amount, a further conditional payment. Its funding is recorded later, when it is paid, prefilled from the tranche term.

So the commitment is the purchase plus its tranches, in each currency, and cost counts only what has been funded.

A later round in a company the organisation already holds adds its rows to the existing holding, once per deal. Tranche funding is offered later only for the deal that created the holding; a later round's tranche funding is recorded by hand when it is paid.

7. Versioning

This section is carried by Methodology M7. M7 adds to what the look-through estimate ignores (license payments the company owes, territory-limited rights, and a licensor's own royalty inside it), with the matching label; states that a scenario for a license or a royalty must model that position; and states that unknown bases are not added. Its text as M6 published it stays available as version M6. The look-through estimate was new in M6; the other four methods are documented as they have worked since holdings were introduced. This section changes no rNPV model value; the model changes in the same release (engine 4.0.0) are documented in the rNPV Model and IRA sections. Every issued export still verifies. Holding values are shown in the workspace only; no export, REST or MCP response carries them.