The Industry Index is a new way to review the potential value of your equity. Updated daily.
What is the Industry Index?
The value of your equity in your private company is volatile and uncertain. Historically, you only had the last preferred share price to indicate the value of your equity stake in a company.
With the Industry Index, Secfi is innovating to deliver you another perspective on the potential value of your equity. This index compares your company's equity value to a relevant group of its publicly traded counterparts.
The rationale is that when the market values a certain set of companies at a high valuation, it’s generally more likely that a successful private company will also be valued higher after going public. The opposite is also true; when comparable companies in the public market are trading lower, the private company might also trade lower after going public.
Important: This assumes your company’s general performance (revenue growth, EBITDA, etc.) is similar to the comparable group.
For example: To value a company like Airbnb before it went public, it would be helpful to look at the share price of Booking.com, Expedia, and Tripadvisor compared to its revenue, revenue growth, and margins. These metrics can help value Airbnb.
The Industry Index doesn’t forecast the true value of your company. That’s dependent on many other factors, but it helps give you another perspective on how your companies’ counterparts have been trading since your company last raised.
How is the set of public comparable companies selected?
The group of companies is curated by Secfi’s Investments and Capital Markets teams. They create the index by comparing revenue, revenue growth, and margins.
How does the calculation work?
This is how we calculate your equity value, and your company value, based on the Industry Index:
- We take the average change percentage of the full group of public companies. In this calculation, the companies are equally weighted.
- We apply that change percentage to your equity value or your company value.
- We do this for every data point in the graph.
- Whenever you company raised a round, we ‘reset’ the Industry Index on that point in time, and re-calculate it going forward.
How often is the Industry Index updated?
The Industry Index is automatically updated every day, because we fetch the market data of the public companies daily.
Feedback or questions?
You can send a message directly to the team that built this feature.