---
title: "What Is Mark-Down?"
term: "Mark-Down"
description: "Mark-down is lowering the reported carrying value of an investment on a fund's books—typically when a portfolio company's fair value has fallen since the last reporting period."
date: 2026-07-25T00:00:00.000Z
updated: 2026-07-25T00:00:00.000Z
topics: ["venture-capital"]
source: https://venturecapitaltracker.com/glossary/mark-down
---

# What Is Mark-Down?

> Mark-down is lowering the reported carrying value of an investment on a fund's books—typically when a portfolio company's fair value has fallen since the last reporting period.

**Mark-down** is a reduction in the fair value at which a fund carries a portfolio company on its financial statements or LP reports.

### How it works

Private funds [mark investments to market](/glossary/mark-to-market) periodically—quarterly or after material events. When evidence suggests lower fair value, GPs record a mark-down:

- Priced down round or structured reset
- Deteriorating KPIs vs plan with no near-term financing
- Public comps or M&A multiples compressing the sector
- Inside round at lower valuation

Example: a fund held Series B preferred at $80M post-money valuation on its books. A new financing at $50M post triggers a mark-down to align carrying value with the transaction price, subject to ownership and preference math.

Mark-downs are accounting adjustments, not cash losses. Realized loss happens only on exit at lower proceeds. Conversely, mark-downs can reverse with subsequent [mark-ups](/glossary/mark-up) if performance recovers.

### Why it matters

- **Founders:** Your lead's reported value of your company affects their internal metrics and LP conversations. Proactive communication around setbacks reduces surprise marks.
- **Investors:** LP portfolio reviews track mark-down frequency by GP as a discipline signal—aggressive marks vs stale marks both tell stories.

### Common mistake

Assuming a mark-down means the GP sold shares or lost cash. It is an unrealized valuation change until exit or write-off.

### Related ideas

See also [mark-up](/glossary/mark-up), [mark-to-market](/glossary/mark-to-market), [409A valuation](/glossary/409a-valuation), and [down round](/glossary/down-round).

## FAQ

### What is mark-down in simple terms?

The investor reduces the paper value of your company on their internal books. If they marked you at $100M last quarter and evidence supports $70M, that $30M drop is a mark-down—not necessarily a sale.

### Why does mark-down matter?

LPs see mark-downs in quarterly reports and it affects fund performance metrics. For founders, marks follow reality—new term sheets, flat rounds, or missed milestones—not GP mood alone.


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Source: https://venturecapitaltracker.com/glossary/mark-down