Before selecting a valuation methodology, building a model, or discussing a valuation conclusion, investors typically need to answer two very different questions: 👉 What do we know about the company? 👉 What do we know about the investment? These may sound similar. In practice, they are completely different information-gathering exercises. 1️⃣ Understanding the Company The first exercise is understanding the company's current circumstances. Questions might include: • Is the

We spend a lot of time discussing the technical side of fair value under IPEV and ASC 820:Calibration, Methodology selection, OPM, PWERM, Waterfalls and Market-participant assumptions. All of these are important. But perhaps it's worth taking a step back. Before deciding how to value an investment, firms first need to manage the valuation process itself. For many VC CFOs and finance teams, quarter-end and year-end valuations are among the most stressful periods of the report

In venture capital, there comes a point where a company has not raised a new funding round for a considerable period of time. It hasn't reached an IPO or an acquisition, there is no recent market transaction to rely on, and yet the fund still has to determine a robust fair value for its investment. This is arguably the most challenging stage in venture capital valuation. The challenge isn't performing the calculations. Modern valuation platforms can do that. The real challeng

One investment. Five valuation approaches. Values from $2.00 million to $4.09 million. Over the past few months, I’ve written extensively about venture capital fair value. We’ve explored valuation methodologies, shareholder rights, breakpoints, waterfalls, calibration, back-solve, OPM, PWERM, CVM, ASC 820, the IPEV Guidelines and AICPA guidance. Each topic is important. But none of them are the end goal. Ultimately, venture capital funds don’t report OPMs, waterfalls or calib

If you're involved in venture fund valuations, you'll probably recognise this. ✅ Someone is checking whether the cap table is up to date. ✅ Someone else is hunting for signed investment documents. ✅ There are questions about rights, SAFEs, convertibles and waterfalls. Then comes the investment review. "Can we still rely on the last funding round?" "Do we need to run a waterfall?" "The auditors mentioned OPM... but is it really necessary this quarter?" "Has there been a signif

Every quarter, venture funds invest significant time and resources into financial reporting • The finance team prepares the accounts. • Auditors review the process. • LP reports are produced. • Governance meetings are held. • Documentation is completed. All of this effort ultimately supports one number: Net Asset Value (NAV) NAV influences: • LP reporting • Financial statements • Fund economics • Investor confidence It is arguably the single most important financial number a

Making Institutional-Quality Venture Fair Value Practical and Achievable - Without Making It Less Rigorous Venture Capital Is Entering a New Era Venture capital is entering a new era of accountability. LPs expect institutional-quality fair value. Auditors expect defensible methodologies. Regulators expect consistency and transparency. Funds increasingly expect to operate with the same sophistication as the institutions they resemble. Yet, for many venture funds, institutional

Most discussions about cap tables focus on accuracy. Does the cap table correctly reflect every financing round? Are all SAFEs, options, warrants, and share issuances captured? Is the ownership ledger complete and up to date? Of course, that matters. But for sophisticated venture investors, fund managers, valuation professionals, and finance teams, cap table accuracy is not the end goal. It is merely the starting point. The real objective is ensuring that the waterfall is acc

Over the past year, we’ve seen a clear shift in expectations around how Fair Value is assessed for venture-backed investments and auditors are increasingly at the center of helping clients navigate this complexity. The latest December 2025 IPEV Guidelines reinforce something many of us have been discussing for a while: headline valuation ≠ Fair Value. Simply taking last price per share × number of shares held - regardless of share class rights and preferences is no longer suf

A cap table isn’t just a record of today. It’s a model of what a company can become. For VCs, that model underpins everything: • capital invested at entry • dilution across future rounds • reserve strategy • and ultimately — fund IRR |The best investors don’t just review a cap table. They actively use it as an analytical tool. They expand it forward. They model: • multiple potential financing paths (up rounds, flat rounds, down rounds) • different participation decisions and

One of the realities in venture valuation is this: Most firms don’t follow IPEV or ASC 820 in a fully “by-the-book” sense. Not because they disagree with the guidance, but because in practice, applying it rigorously can feel disproportionate to the pace and uncertainty of venture investing. So, what happens instead? Fair value often leans on practical, straightforward approaches: • Recent transaction prices • Waterfall-based allocations • Selective updates between financing e

As venture capital has matured into a true institutional asset class, expectations around fair value have evolved significantly. Fair value is no longer just a quarter end exercise, or the mechanical application of a valuation model. It is becoming an institutionalized process: repeatable, transparent, evidencebased, and capable of being clearly articulated to investment committees, auditors, LPs, and regulators. This shift is also reflected in industry guidance. Frameworks s

We often treat fair value like a destination: a precise figure we need to “get right.” But in reality, fair value is not a number - it’s a discipline. And it starts with a shift in mindset. This is especially true when we’re dealing with VC-backed companies with complex cap tables. These aren’t simple businesses - they’re shaped by multiple share classes, liquidation preferences, conversion rights, and path-dependent outcomes. Value doesn’t sit in a single line. It’s distribu

As we approach the end of Q2 2026, private markets continue to navigate heightened uncertainty—from geopolitical developments to shifts in growth expectations, the impact of AI, and increased scrutiny in private credit. In this context, robust and disciplined fair value measurement has never been more important. It is central not only to compliance, but also to how investors, boards, and stakeholders interpret risk, report performance, and make capital allocation decisions.

You run deep diligence on market size, competitive dynamics, founder quality, and traction. But when it comes to returns, the thing that ultimately matters most - many investment decisions still rely on a few static exit assumptions and a spreadsheet model that’s brittle, linear, and often misleading. The reality is: Your outcome isn’t driven by valuation alone. It’s driven by the interaction of: • Structure (preferences, participation, conversion) • Dilution (future rounds y

Most founders, operators, and even many investors understand parts of VC economics: • Dilution • Valuations • Term sheets But the real insight comes from connecting them into one system. At its core, venture economics can be understood as two sets of three: 🔹 1) Cap Table Economics — The Rules of the Game This is where value distribution is defined. 1. Share classes Common vs. Preferred (and the variations in between) 2. Shareholders Founders, investors, employees 3. Rights

Most VC firms still manage cap tables, waterfalls, and ownership models in spreadsheets. And for years, that worked. But venture portfolios have become more complex. More rounds. More instruments. More reporting requirements. More LP scrutiny. This carousel explores why leading VC firms are beginning to view cap table infrastructure differently, not as an administrative tool, but as a source of better decision-making, stronger governance, and greater operational leverage acro

Most firms treat fair value as an output. A number to report. But the more interesting question is: What can fair value teach us about our portfolio? When used well, it becomes a lens into the economics of your investments, not just an accounting exercise. It can help answer questions like: • Which investments are most sensitive to assumptions? • Which companies have the widest range of outcomes? • Where is value concentrated today? • Where is uncertainty concentrated? At the

After working across hundreds- if not thousands - of cap tables and their underlying documentation, one pattern is unmistakable: 👉 Around 20% of cap tables contain at least one material question that, if unresolved, means the cap table is incomplete or inaccurate. 👉 A meaningful subset goes even further- into genuinely complex and problematic territory We regularly see issues such as: Conversion prices and conversion ratios being swapped (yes this happens) Share price incon

For years, fair value in venture capital has been one of the least standardized and most resource-intensive parts of the investment lifecycle. Despite the increasing sophistication of the asset class, valuation processes often lagged behind, relying on fragmented data, manual models, and highly time-consuming workflows. For many firms, achieving true rigor meant committing significant internal resources or external advisory costs, making consistency and scalability a challeng