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Startup beta adjust

Dampens an unstable post-IPO beta by 15%. A company with only months of trading history measures its own novelty as much as its risk.

Updated 2026-09-03

The startup beta adjustment dampens a measured beta by 15 percent for a recently listed company. It is a manual switch on the screener, off by default.

It exists because a beta measured over a short, post-IPO history is unstable. Newly listed shares trade on lock-up expiries, index inclusion, and a shifting holder base, none of which is a measurement of the underlying business risk. The measured figure tends to be both extreme and unrepresentative.

Use it deliberately or not at all. Lowering beta lowers the discount rate, which raises intrinsic value, so this is a switch that makes things look cheaper. That is a good reason to be able to justify it before flipping it.

See also

  • Beta — How much the stock moves relative to the S&P 500. A beta of 1.0 moves with the market, higher is more volatile, and higher volatility raises the discount rate.
  • Cost of equity — The return shareholders demand for owning this particular company. Known as CAPM, the capital asset pricing model.

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Educational content, not investment advice. Angie explains how a valuation is built so you can judge it yourself. What you do with that is your call.

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