How Estimated Value is Calculated

After you invest in a company on Wefunder, the value of that investment will change over time. It may go up if the company raises additional rounds of financing, is acquired, or goes public. It may go down if the company goes out of business. That change in value is referred to as the “return” on your investment.

Portfolio Value Formula

Total Estimated Value = Amount Invested + Unrealized Returns + Realized Returns

Realized Returns

Realized returns reflect the actual gain or loss you’ve received from an investment:

• Cash distributions exceeding initial investment amount: recorded as a realized gain.
• Company failure: recorded as a realized loss, only after confirmation that the company has ceased operations. Marking a failure has irreversible tax implications for you as an investor. When we believe a company may have failed, we first reach out to the team for confirmation. If we do not receive a response, we review public information, including the company website, LinkedIn, dissolution filings, and other public records. If all evidence indicates the company has ceased operations, we classify it as a realized loss.
• Exits (M&A or IPO): recorded as a gain or loss based on the value of cash or shares distributed to you.

Unrealized Returns

Unrealized returns reflect changes in your investment value that have not yet been distributed to you. These are also referred to as “paper” gains or losses. We only change the value of your investment if the company has raised a subsequent financing event priced by an institutional investor or a funding portal. To determine the multiple you see, we compare the price at which you invested to the price per share of the most recent funding round. Using the price per share (rather than the valuation) in this calculation allows us to account for dilution across rounds.

We do not update your unrealized return value based on…

• Open funding rounds; we will not update your portfolio until we confirm that the round has closed.
• Subsequent convertible rounds; we wait until a priced round has converted your investment before showing an unrealized return. For example, if you invested on a SAFE with a $10M valuation cap, and the company raises a new round of SAFEs at a $15M valuation cap, your unrealized return value will not change. We may still post an update to indicate company trajectory.
• Secondary sales, as they are negotiated privately and are often limited or reflective of unique circumstances rather than a company’s true market value.
• 409a valuations or other third-party estimates of a private company’s fair market value, as these valuations are not market-driven.

Additional Guidance for Vault Investors

We apply the same valuation approach as above, but fee treatment varies by investment type.

Pre-IPO Single Asset Funds:

• The investment share price reflected on your portfolio is “all-in” and includes any underlying fees from deal partners.
• The Wefunder vehicle management fees are deducted before calculating your share count.
• Carry is not deducted until you receive a realized return greater than your initial investment amount.
• This means that an unrealized return reflected in your portfolio is net of fees, but not net of carry.

Multi-Asset Funds:

• The Wefunder vehicle management fees are deducted before capital is deployed.
• Carry is not deducted until the fund has returned contributed capital net of management fees.
• This means that an unrealized return reflected in your portfolio is net of fees, but not net of carry.
• Your portfolio reflects your pro-rata share of both the unrealized and realized returns of the fund.