---
title: "What Is Write-Down?"
term: "Write-Down"
description: "A write-down is reducing the carrying value of an asset on the books — marking a portfolio company or loan below prior reported value when performance or market conditions deteriorate."
date: 2026-07-25T00:00:00.000Z
updated: 2026-07-25T00:00:00.000Z
topics: ["venture-capital"]
source: https://venturecapitaltracker.com/glossary/write-down
---

# What Is Write-Down?

> A write-down is reducing the carrying value of an asset on the books — marking a portfolio company or loan below prior reported value when performance or market conditions deteriorate.

**A write-down** lowers the book value of an asset while keeping it on the books — acknowledging impairment without fully abandoning the investment.

### How it works

Venture funds mark portfolio companies to fair value each quarter under ASC 820 (US) or similar standards. Triggers for write-downs:

- Down round financing at lower price
- Prolonged underperformance vs plan
- Public comp multiple compression affecting late-stage marks
- Inside rounds with flat or punitive terms

Example: fund carried a Series B position at $20M fair value; new insider round implies $8M. Fund [writes down](/glossary/write-down) $12M in NAV — LPs see lower TVPI until recovery or exit.

Write-down differs from [write-off](/glossary/write-off) — write-off typically means zero or near-zero value after shutdown or total loss expectation. Write-downs can reverse via [write-ups](/glossary/write-up) if company recovers.

Founders rarely control fund marks but feel them in follow-on appetite and internal partner attention.

### Why it matters

- **Founders:** Lead investor write-downs precede harder board conversations — address root causes before reserve decisions.
- **Investors:** Consistent marking discipline matters for LP trust; delaying write-downs creates cliff events.

### Common mistake

Treating unchanged headline valuation as investor confidence when funds quietly wrote down in LP reports — ask directly about current mark methodology.

### Related ideas

See also [write-off](/glossary/write-off), [write-up](/glossary/write-up), and fair value marking.

## FAQ

### What is a write-down in simple terms?

A write-down lowers the reported value of an investment — the fund still owns it, but admits it is worth less than before, often after a down round or missed milestones.

### Why does a write-down matter?

For investors, write-downs affect fund TVPI and LP reporting. For founders, a lead investor marking you down signals internal concern even if they have not publicly changed terms.


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Source: https://venturecapitaltracker.com/glossary/write-down