Mark-to-market is the practice of measuring assets at their current fair value, updating carrying amounts when market or transaction evidence changes.

How it works

Public securities mark-to-market daily using exchange prices. Private funds mark portfolio companies each reporting period using:

• Recent financing rounds (primary or secondary)
• Comparable public company multiples
• Revenue or EBITDA-based models with discount rates
• Third-party valuation firms for ASC 820 / IFRS fair value

When fair value rises, funds record a mark-up; when it falls, a mark-down. NAV aggregates marked values minus liabilities.

Illiquid startups lack continuous prices, so mark-to-market is judgment-based—governed by valuation policies and LPAC review on contentious calls.

Why it matters

• Founders: A new round is the clearest mark-to-market input. Long gaps without pricing invite GP models that may not match your self-assessment.
• Investors: Mark-to-market NAV drives DPI/TVPI interim metrics. Stale marks distort GP league tables; aggressive marks reveal discipline or optimism.

Common mistake

Thinking mark-to-market applies only after IPO. Private funds mark continuously; public listing just adds a visible ticker to the same concept.

Related ideas

See also mark-down, mark-up, NAV, and 409A valuation.