In a recent email to investors, EquityZen‘s Phil Haslett revealed the methods that Morgan Stanley uses to value its pre-IPO unicorn investments. Morgan Stanley recently marked down the values of their positions in Palantir, Dropbox, FlipKart and SurveyMonkey.

According to EquityZen’s research, Morgan Stanley uses weighted average cost of capital, perpetual growth rate and enterprise value/revenue to determine the value of pre-IPO tech names. The firm also discounts all of its holdings by 20 percent as a “discount for lack of marketability.”

Typically, revenue valuation multiples range from 10x to 18x.

“What this means is that MS estimates the valuation of their private tech company investments by using an industry-accepted multiple of the company’s annual revenue,” Haslett explains.

Since Morgan Stanley shares its price-per-share for each investment, EquityZen used…

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