Write-Down

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.