Mark-up is an upward adjustment to the fair value at which a fund records a portfolio company on its books.

How it works

Funds mark-to-market on a regular cadence. Mark-ups occur when fair value exceeds prior carrying value:

• New financing at higher valuation
• Beating plan with credible path to near-term raise
• Public peer multiples expanding the implied range
• Acquisition offers or secondary trades at higher prices

Example: after a Series C at double the prior post-money, the lead fund marks its Series A stake up to reflect dilution-adjusted value gain—paper profit on the LP report, not cash in pocket.

Mark-ups can partially reverse via mark-downs if conditions worsen. LPs distinguish unrealized mark-ups from DPI—cash actually distributed.

Why it matters

• Founders: Positive marks help your investors raise their next fund and support follow-on checks internally. They also raise expectations for the next round’s pricing.
• Investors: Interim TVPI includes mark-ups; diligence asks how much is marks vs realized returns.

Common mistake

Treating mark-ups as permanent validation. Without revenue and retention backing, marks ahead of the next priced round can invite sharp markdowns later.

Related ideas

See also mark-down, mark-to-market, TVPI, and up round.