Metrics & Performance
Unrealized Gains
The paper profit on investments that haven't been sold or exited yet.
Unrealized gains represent the increase in value of portfolio investments that remain held by the fund. These gains are reflected in fund valuations and TVPI calculations but haven't been converted to actual cash distributions. The gap between unrealized and realized gains is a critical risk factor in fund performance assessment.
In Practice
A fund invested $5M in a startup now valued at $50M based on its latest round. The $45M unrealized gain contributes to the fund's TVPI but could evaporate if the company's value declines before exit.
Why It Matters
Unrealized gains can be misleading — they depend on interim valuations that may not hold. Experienced LPs discount unrealized gains significantly when evaluating fund performance.
Related Concepts
Further Reading
The Tax Benefits of Angel Investing: QSBS Explained
How Section 1202 QSBS can exclude up to $10 million in capital gains from angel investments — the requirements, holding periods, and how this tax benefit dramatically changes the return math.
Building a Venture Capital Track Record From Zero
How emerging fund managers build a credible VC track record from scratch — angel investing strategies, attribution frameworks, and the path from first check to Fund I.
How Venture Capital Returns Actually Work
Most VC funds lose money. The ones that don't rely on a brutal math equation most LPs barely understand. Here's how the power law really plays out.
How Venture Capital Firms Make Money
Management fees, carried interest, and the math behind VC fund economics. Here's exactly how venture capital firms generate returns and get paid.
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