Metrics & Performance
Last updated
Quick Answer
A reduction in the carrying value of a portfolio investment — typically reflecting poor company performance or a down round financing.
A write-down (or mark-down) occurs when a VC fund reduces the carrying value of a portfolio investment on its books. Triggers for write-downs: the portfolio company raises a new round at a lower valuation (down round), significant negative events (loss of a major customer, executive departure, regulatory problem), comparable public company multiples decline significantly, or the company is clearly failing and liquidation is imminent. Write-downs reduce TVPI and NAV but don't affect DPI (which only includes realized returns). A partial write-down reduces value but retains some mark; a full write-down to zero (write-off) recognizes total loss. Writing down investments proactively — rather than maintaining inflated marks — is a sign of intellectual honesty and builds LP trust.
In Practice
Accel Partners invested $5M in FoodTech startup GreenPlate at a $20M post-money valuation in 2022. By Q4 2023, GreenPlate's revenue growth stalled at 10% annually, key partnerships fell through, and they struggled to raise their Series B. When similar companies were trading at 3x revenue instead of the original 8x multiple, Accel marked down their investment by 60% - from $5M to $2M on their books. This write-down reflected the company's deteriorating fundamentals and reduced exit prospects, even though GreenPlate was still operating and might recover.
Why It Matters
Write-downs directly impact fund performance metrics like IRR and multiple, affecting GP compensation and future fundraising ability. For founders, write-downs signal investor pessimism and make follow-on funding extremely difficult - existing investors won't lead, and new investors see the markdown as a red flag. Understanding write-down triggers helps founders proactively address performance issues before they become permanent valuation scars that follow the company through future rounds.
VC Beast Take
Most founders don't realize write-downs can become self-fulfilling prophecies. Once marked down significantly, even recovering companies struggle with valuation expectations in future rounds. Smart GPs use write-downs strategically - sometimes marking down performing companies to create upside surprise for LPs later.
Venture Capital KPIs: 20 Metrics Every GP Should Track
Most GPs are flying blind. Here are the 20 VC KPIs that separate disciplined fund managers from everyone else — with benchmarks, formulas, and why each one matters.
50+ Venture Capital Interview Questions by Role (With Sample Answers)
Preparing for a VC interview? Here are 50+ real questions organized by role — Analyst through GP — with sample answer frameworks from people who've been on both sides of the table.
What Happens During a Down Round: A Step-by-Step Breakdown
A down round isn't just a bad headline — it's a complex legal and financial event with real consequences for founders, employees, and investors. Here's exactly what happens, step by step.
How to Write an LPA: The Limited Partnership Agreement Guide for Fund Managers
A practical 2026 guide for venture capital and private equity fund managers on drafting, negotiating, and operating under a Limited Partnership Agreement (LPA): key sections, ILPA standards, costs, lawyer selection, and common mistakes.
How to Write a Fund Investment Memo That Gets Yes Votes
A step-by-step guide to writing the internal investment memo that convinces your partnership to say yes. Structure, key sections, and what separates good memos from great ones.
VC Internships in 2025: How to Land One (NYC, SF, London, Remote)
VC firms hire interns July-October for summer roles paying $3K-$8K/month. Here's who hires, what you'll do, and how to stand out in NYC, SF, London, or remote.
How to Write an LP Update That Actually Gets Read
Most LP updates are skimmed or ignored. Here's how to write quarterly updates that LPs actually read, remember, and use to justify re-upping in your next fund.
How to Run an Effective Board Meeting as a Startup CEO
Most CEOs walk into board meetings unprepared and walk out having wasted 3 hours. Here's how to run a board meeting that drives decisions, builds trust, and actually helps your company.
How to Find and Approach Investors for Your Startup
A step-by-step guide for founders on finding and approaching investors: building a targeted list, getting warm intros, cold email templates, first meeting structure, and realistic pipeline metrics.
How Venture Capital Works: The Complete Guide
Everything you need to understand about venture capital — how funds raise money, how deals get done, and how returns flow back to investors. The definitive primer.
A write-down (or mark-down) occurs when a VC fund reduces the carrying value of a portfolio investment on its books. Triggers for write-downs: the portfolio company raises a new round at a lower valuation (down round), significant negative events (loss of a major customer, executive departure,...
Understanding Write-Down is critical for founders navigating the fundraising process. It directly impacts deal terms, valuation, and the relationship between founders and investors.
Write-Down falls under the metrics category in venture capital. This area covers concepts related to the quantitative measures used to evaluate fund and company performance.
Newsletter
Join thousands of founders and investors. Every Tuesday.
The VC Beast Brief
Master VC terminology
Get smarter about venture capital every week. Our newsletter breaks down the terms, concepts, and strategies that matter.
VentureKit
Ready to launch your fund?