VC & PE Glossary
What Is Mark-Up?
Definition
Mark-up is increasing the reported carrying value of a portfolio investment when fair value has risen—often after an up round, strong operating results, or higher public comps.
Useful for: Founders, Investors
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.
Related terms
- 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-to-Market — Mark-to-market is valuing assets at current fair value rather than historical cost—standard for fund portfolio reporting and for adjusting holdings to observable market prices.
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