To mark down Don’t recognize your portfolio or your portfolio? That’s a question that many venture capitalists are currently grappling with.
But first, what does this mean? VCs keep a running tab of the value of each fund and the portfolio as a whole based on the prior valuations each company has accumulated. Each company’s value is usually updated only when it raises a round at a new valuation, and firms usually do a full valuation audit at the end of each year.
But, yes, only venture capitalists have It is generally considered good faith for LPs to audit the value of their portfolios once a year, if there is an adverse external event affecting a particular company or the entire portfolio.
As market conditions worsen and company valuations continue to fall, many VCs are sitting on portfolios with outdated and inflated valuations. I venture that investors would be wise to take a look now and not wait until the end of the year.