---
title: "What Is Unrealized Value?"
term: "Unrealized Value"
description: "Unrealized value is the estimated worth of investments still held — not yet converted to cash through sale, IPO, or distribution to LPs."
date: 2026-07-25T00:00:00.000Z
updated: 2026-07-25T00:00:00.000Z
topics: ["venture-capital"]
source: https://venturecapitaltracker.com/glossary/unrealized-value
---

# What Is Unrealized Value?

> Unrealized value is the estimated worth of investments still held — not yet converted to cash through sale, IPO, or distribution to LPs.

**Unrealized value** is the carrying amount of assets an investor still holds — equity, warrants, or fund interests — based on current estimates rather than cash received from a closed exit.

### How it works

Venture funds call capital from LPs, invest in startups, and mark each position periodically. Until a company is sold or goes public, the fund's stake has **unrealized value**, usually tied to the latest priced round, a board-approved 409A, or fair-value guidelines. Add those marks across the portfolio and you get net asset value (NAV) — the unrealized bulk of [total value](/glossary/total-value).

When a fund distributes proceeds after an exit, that portion becomes **realized**. [TVPI](/glossary/tvpi) equals distributions plus NAV divided by paid-in capital — so a 2.0x TVPI might be 0.3x DPI (cash back) and 1.7x still unrealized. Individual founders see the same split on personal cap tables: paper wealth from preferred marks vs cash from secondary sales or acquisition payouts.

Marks can rise on up rounds and fall on flat rounds, down rounds, or public comparables. They are opinions until a buyer sets a price.

### Why it matters

- **Founders:** Investors with large unrealized gains may support follow-ons; heavy unrealized losses trigger reserve debates and tougher terms.
- **Investors:** LPs distinguish paper from cash when judging GP skill. Reporting emphasizes unrealized value mid-fund; mature funds are judged on DPI.

### Common mistake

Treating unrealized NAV as spendable wealth — for funds, LPs cannot rely on marks for liquidity; for founders, illiquid preferred shares are not the same as cash in the bank.

### Related ideas

See also [total value](/glossary/total-value), [TVPI](/glossary/tvpi), [unrealized IRR](/glossary/unrealized-irr), DPI, write-down, and mark-to-market.

## FAQ

### What is unrealized value in simple terms?

Unrealized value is what your stake is marked at today if you have not sold. A fund's remaining portfolio NAV is mostly unrealized until companies exit and LPs receive distributions.

### Why does unrealized value matter?

It drives interim fund metrics like TVPI and unrealized IRR. Founders should know that investor marks affect fund health and follow-on appetite — but only realized proceeds pay employee secondary programs and LP commitments.


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Source: https://venturecapitaltracker.com/glossary/unrealized-value