NAV (net asset value) is the book value of a fund’s assets minus its liabilities at a point in time — the number LPs see on quarterly statements for unrealized portfolio value.

How it works

A venture fund holds stakes in fifteen private companies, $5M cash, and owes $500K in accrued fees. Each company is marked to fair value under fund accounting rules — often last round price, with adjustments for down rounds, milestones, or impairments. Sum the holdings, add cash, subtract liabilities: that is fund NAV.

NAV rises when portfolio companies raise up rounds or grow into higher marks; it falls on write-downs or realizations at a loss. Distributions reduce NAV when cash exits to LPs but increase DPI (distributed capital). TVPI blends realized and unrealized value.

Founders rarely calculate fund NAV directly, but their round pricing and reporting quality feed into how GPs mark your company on the fund’s books.

Why it matters

• Founders: Your financing terms and transparency affect how investors carry you on NAV. Surprises in metrics can trigger write-downs that hurt a GP’s fundraising narrative.
• Investors (LPs): NAV shows paper performance before exits. It is useful for pacing and portfolio construction but is not liquidity — marks can lag reality for years.

Common mistake

Treating quarterly NAV as spendable wealth. Unrealized marks depend on judgment, stale rounds, and market sentiment; they can move sharply at the next financing or exit.

Related ideas

See also NAV facility, paper gain, TVPI, and fair value marks.