Podcast: Venture Fund Valuations

The Alternative Edge

In this episode of The Alternative Edge, a Weaver: Beyond the Numbers podcast, host Becky Reeder, an audit partner and co-leader of the alternative investments practice at Weaver, engages with Sindhu Rajesh, an Alternative Investment Services Partner with Weaver. They unpack the complexities of venture fund valuations, offering critical insights into industry dynamics and best practices for fund managers approaching year-end valuations.

Key Points:

• Be proactive with year-end investment valuations, and discuss your approach with the auditors during interim testing.
• For stale investments, consider progression towards milestones, company’s financial situation and secondaries market transactions to determine valuation. Don’t just default to keeping it at last funding round automatically.
• Auditors can provide valuable insights based on knowledge and expertise of clients who encounter similar challenges, so use them as a resource.

As fund managers navigate the choppy waters of venture fund valuations, Becky and Sindhu emphasize the need for proactive communication and thorough analysis. Sindhu advises managers to scrutinize portfolio investments lacking recent financing activity and to seek more than just the last-known financials. The discussion also pivots to understanding the valuation caps of current funding rounds and ensuring adequate cash flow for portfolio companies.

“Request financial, non-financial information… Don’t just default to cost or last round just because you’ve not had any information about the company,” Sindhu asserts. This statement encapsulates the podcast’s  theme: the critical nature of diligent, informed valuation practices in venture fund management.

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