Metrics & Performance
Stale Pricing
When a portfolio company's valuation is based on an outdated funding round that no longer reflects current fair value.
Stale pricing occurs when a private company's reported valuation is based on a funding round that happened months or years ago and no longer reflects the company's current trajectory. This is a pervasive issue in venture fund reporting because there's no continuous market to update prices. Stale pricing can overstate fund performance during downturns and understate it during growth periods.
In Practice
A fund reports a portfolio company at its 2021 Series C valuation of $500M, but the company's revenue has declined 30% and comparable public companies trade at 60% lower multiples. The true value may be closer to $150M.
Why It Matters
Stale pricing creates an illusion of stability in VC portfolios. Sophisticated LPs adjust for stale pricing when evaluating fund performance, knowing reported NAV may not reflect reality.
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