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Metrics & Performance

Write-Up

Last updated

Quick Answer

An increase in the carrying value of a portfolio investment on a fund's books, typically triggered when the company raises a new financing round at a higher valuation.

When a portfolio company raises a new round at a higher valuation, the VC marks up its investment — increasing the fund's TVPI on paper. Write-ups are unrealized gains: no cash has been received, and the investment hasn't been sold.

Write-ups improve fund metrics on paper and help GPs raise subsequent funds based on strong interim performance. The 2022-2023 correction forced write-downs across many portfolios that had been aggressively marked up during 2020-2021.

In Practice

A fund invests $2M for 10% of a company at a $20M valuation. The company raises Series A at $80M. The fund writes up its position to $8M carrying value (10% of $80M) vs. $2M invested = 4x paper return. No cash has changed hands.

Why It Matters

Sophisticated LPs always weight write-ups appropriately — real performance is DPI. A portfolio full of write-ups with no realizations is promises, not returns.

VC Beast Take

Write-ups aren't returns. The 2020-2021 era proved this when firms showing 5x paper returns used those numbers to raise new vehicles — then saw marks collapse to near cost basis two years later. Sophisticated LPs weight write-ups appropriately and focus on DPI.

Frequently Asked Questions

What is Write-Up in venture capital?

When a portfolio company raises a new round at a higher valuation, the VC marks up its investment — increasing the fund's TVPI on paper. Write-ups are unrealized gains: no cash has been received, and the investment hasn't been sold.

Why is Write-Up important for startups?

Understanding Write-Up is critical for founders navigating the fundraising process. It directly impacts deal terms, valuation, and the relationship between founders and investors.

What category does Write-Up fall under in VC?

Write-Up falls under the metrics category in venture capital. This area covers concepts related to the quantitative measures used to evaluate fund and company performance.

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