Valuation of Portfolio

The venture capital portfolio has to be valued from time to time to monitor and evaluate the performance of the venture capital investment, that is, whether there has been an app the value of the investment or otherwise. The portfolio valuation approaches techniques on the type of investments, namely, equity and debt instruments. These, in turn, depend stage of investment: seed, start up, early and later stages of the venture.

Equity Investments

The valuation methods for equity instruments of VCUs are: (i) cost method, and (ii) market value based methods

Cost Method

According to this method, the value of equity holding is computed recorded  historical cost of acquisition until it is disposed of. Although simple, objective, and easy stand, it does not indicate a fair value of investment, does not reflect management pert and may result in two values for equity acquired at two different points in time. It provide a satisfactory basis of valuation of venture capital investments.

reCAPTCHA is required.

Share This