Q3 2020 Update
In the third quarter of 2020, the SharesPost Private Growth Index, which tracks valuations for 141 private growth firms, increased by 29.0 percent.
For 2020 through the third quarter, the SharesPost Private Growth Index increased 31.8 percent.
Since its launch on January 1st, 2017, the SharesPost Private Growth Index has increased 201.5 percent through September 30, 2020.
About the SharesPost Private Growth Index
The SharesPost Private Growth Index (the “Index”) is designed to measure the performance of VC-backed, U.S.-based, private growth companies. The Index is composed of a broad array of companies, spanning multiple technology-driven sectors including Consumer Internet, Enterprise Software, Energy, Health Care, and Financial Services. Now, investors in the private growth asset class will have a quantitative measure of fluctuations in the valuations of the companies driving its performance.
SharesPost Private Growth Index is designed to be a proxy of the performance of a group of private growth companies, but is not illustrative of any particular investment. You cannot invest directly in the SharesPost Private Growth Index or any other index. Past performance is no guarantee of future results.
The Index value is calculated based on a proprietary formula developed and compiled by SharesPost Research LLC to track and measure movement in the valuation levels of VC-backed private growth companies. The Index was originally set to a base of 100.00 at its initiation on January 1, 2017, and will be updated on a quarterly basis. The SharesPost Private Growth Index is based on data obtained from secondary transactions executed on the SharesPost Financial Corporation platform, publicly disclosed primary funding rounds, and valuation marks from publicly reporting institutional holders.
The SharesPost Private Growth Index is an equal-weighted, capital appreciation index designed to track U.S.-domiciled private growth companies. We define “private growth” as companies that are “late stage” and have not yet entered the public markets. There are multiple criteria we use to define the threshold between venture (or “early stage”) and growth (or “late stage”) for the purposes of inclusion in the Index. The principal metric relied on is capital raised –as when a company has raised USD $100M or more of capital in a single funding round (or USD $200MM or more capital combined), it will ordinarily be categorized as growth stage. The 2017 SharesPost Private Growth Index companies are listed here. At the end of each year, we will rebalance the Index and update the list of companies comprising the Index.
Investing in private company securities is not suitable for all investors. An investment in private company securities is highly speculative and involves a high degree of risk and should only be considered a long-term investment. You must be prepared to withstand a total loss of your investment. Private company securities are also highly illiquid and there is no guarantee that a market will develop for such securities. Each investment also carries its own specific risks and you should complete your own independent due diligence regarding the investment, including obtaining additional information about the company, opinions, financial projections and legal or other investment advice. Accordingly, investing in private company securities is appropriate only for those investors who can tolerate a high degree of risk and do not require a liquid investment.