Metrics & Performance
Mark-to-Market
Adjusting the carrying value of portfolio investments to reflect current market prices or estimated fair values.
Mark-to-market (MTM) is the accounting practice of recording assets at their current estimated fair market value rather than historical cost. VC funds mark to market quarterly for LP reporting. When a portfolio company raises a new financing round, the fund 'marks up' (increases) or 'marks down' (decreases) its investment based on the new transaction price. Between financing events, marks may be maintained at the last round price or adjusted using comparable market data. Mark-to-market creates the TVPI (paper performance) numbers that LPs track — but these are estimates, not realized returns. The 2022 market correction forced widespread markdowns as comparables declined, resulting in painful LP reporting that reflected paper losses on previously high valuations.