To mark your portfolio or not to write down your portfolio? That’s a question many venture capitalists are grappling with right now.
But first, what does that mean? VCs maintain a continuous tab of the value of each fund and the entire portfolio based on the past valuations each company has raised. Each company’s value is generally only updated when it raises a round on a new valuation, and companies typically do a full valuation audit at the end of each year.
While, yes, only venture capitalists to have to audit the value of their portfolios for their LPs once a year, it is generally considered good faith to do so if there is an excessive adverse event affecting a specific company or the entire portfolio.
With market conditions deteriorating and corporate valuations continuing to fall, many VCs are in portfolios that are outdated and overvalued. I bet it would be wise for investors to take a look now and not wait until the end of the year.
