Fund Structure
NAV
Net Asset Value — the current estimated value of a fund's portfolio holdings, used to mark the portfolio to market and calculate fund performance metrics.
NAV (Net Asset Value) is the current estimated market value of all investments held in a venture fund, minus any liabilities. It represents what the fund's holdings are theoretically worth at a given point in time, before distributions have been made to LPs.
For venture funds, NAV calculation is complex because portfolio companies are private and illiquid — there's no public market price. GPs typically mark valuations based on the price of the most recent funding round (often held flat until a new round or exit provides updated information). This is why VC fund performance reports lag reality and can be misleading during rapid market corrections.
NAV is a component of TVPI (Total Value to Paid-In capital): TVPI = (Distributions + NAV) / Paid-In Capital. As a fund matures and distributes capital, NAV decreases while DPI (distributions only) increases.
In Practice
A VC fund has deployed $50M into 15 companies. Based on last-round valuations, the portfolio is marked at $90M NAV. The fund has also distributed $20M in proceeds from two exits. TVPI = ($90M + $20M) / $50M = 2.2x. But if markets correct and marks are written down, TVPI will decline.
Why It Matters
NAV is how LPs track the value of their fund investments before liquidity events. It's important to understand that NAV in venture is highly subjective — marks are often stale, optimistic, or both. The real test is DPI (distributions actually paid), not paper NAV.