We are on a mission to demystify the private markets for everyone. The most important way we do this is by pricing 1,100+ private companies and making that price available for free to all market participants.

We are happy to announce the rollout of the Notice Price algorithm version 1.3. Building the best private company pricing requires iteration, and this iteration increases our pricing accuracy as measured by our ability to predict the price of the next trade.

The core of Notice Pricing algorithm is layered market consensus heuristics and rulesets, the purpose of which is to determine how much consensus currently exists in the private market for a company’s price. The stronger the consensus, the more we emphasize private market activity to establish the Notice Price. When private market consensus is low, we underweight private market activity and place more emphasis on comparables. This results in a stable Notice Price that is affected very little by non-consensus private market activity.

Version 1.3 of the Notice Price algorithm improves on this approach by increasing the emphasis on private market activity in certain situations where private market consensus has been low for an extended period of time. This results in a Notice Price that is more accurate for the large number of companies with less frequent market consensus due to thin trading activity.

Private market consensus varies across companies and over time. As stated above, Notice Price weights public comparables more heavily in cases where market consensus is weaker. Historically, we have represented the strength of market consensus with a Signal Strength icon. With the release of Notice Price v1.3, we are replacing Signal Strength with Notice Price Drivers in order to clarify how we are emphasizing market activity vs. public and private comparables.

Darker shading means the company Notice Price is being driven primarily by private market activity and consensus. Lighter shading means the Notice Price is being driven more by public comparables and macro.

While increased private market activity is generally correlated with increased price accuracy, lighter shading does not mean Notice Price is wrong. It simply means that private market activity is currently being used less to determine Notice Price than private and public comparables. Our goal is to be transparent with our members at all times about how Notice Price is being calculated.

We want Notice Price to be good at predicting the next trade price, and we consider this to be the best way to measure Notice Price accuracy. If we look across all trades in our database, 80% of them fall within a range of +20% and -20% of the Notice Price when those trades occurred.

We are confident that our approach to private market pricing is more scientific and transparent than any other private market data provider. We are constantly evolving the Notice Price algorithm and we will continue to release improvements as we make them with our goal being to increase the accuracy of Notice Price in ways that allow us to continue to provide all market participants with pricing for as many private companies as possible.

Notice Price algorithm relies on private market data, which we largely source through our community of investors and brokers.

The best way to make Notice Price for any company more accurate is to provide us with verified trades, financing round information, and internal marks (eg. 409As) that we do not already have.

Upon receiving that information and verifying its authenticity, we immediately incorporate it into the Notice Price algorithm and make the data available to our members. (Note that trades are bucketed by volume range when displayed on the Notice price chart to protect the anonymity of our members).

Submitting private market data is easy. Investors can add trades as Portfolio positions and Brokers can report trades here. All members can submit non-trade market data by emailing [email protected].

Please contact us if you have any questions, and thank you for helping us provide the best pricing for the private markets!