#123 Q4 Valuations + Real Policy Examples (Download)

Hi everyone! 👋 We’ve published >100 posts - appreciate the support/ sharing w/ friends! Welcome to our new members of @TheFundCFO crew! We recently launched a paid tier and released our VC Fund Playbook + Models @ Streamlined.Fund! Re-linking top posts: #96 The Case for 30+ Co.'s Per VC Fund, #88 Latest Takes on the State of VC, #86 VC Fund Stacks, and Full CFO Archive.

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“You can’t just let life happen to you, you have to make life happen.” -Idowu Koyenikan

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In Case You Missed It: The Year-End CFO/Finance Checklists

We’ve seen a lot of different frameworks over the years to keep track of all the requirements for funds at year-end. One of our favorites is breaking things down into four buckets: portfolio companies, investor reporting, compliance/legal, and operations/HR. Here’s some of the top items in each bucket for year-end…

#119 The Ultimate PE/VC Fund Checklist for Year-End Finance & Compliance (2023 Edition)

#25 Year-End PE/VC CFO/Finance Checklist (2022 Edition)

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VC Valuation Headlines & Policies - Real Examples

Earlier this week, we released post #122 on Q4 Valuations - we highly encourage you to check it out! We shared that “it’s time to review your valuation policies and make sure they provide the right foundation for investor reporting.”

To recap, private equity and venture capital firms are required to value their portfolio of investments quarterly. Those values are published on a schedule of investments (SOI) that is shared with investors and establishes the value of the PE/VC investment fund. At year-end, they review these valuations in detail with their auditors, who are required to sign-off on the numbers.

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Updating Your Valuation Policy + Policy Examples to Download

There isn’t a one-size fits all approach to quarterly valuations! It is driven by where you invest (early vs. late-stage, etc.), the asset type, and your investor, legal, accounting, auditing requirements, and other factors. A valuation policy is an outline of the approach your fund takes to determine the fair value of its portfolio company assets for financial reporting. Fund valuation policies are usually flexible frameworks that VC funds create for their portfolio company investments. You can see more detail on this here: Post #122 on Q4 Valuations.

You can read a lot about valuation policies but ultimately you’re tasked with creating / updating it for your firm! For that, it’s helpful to start with your firm template Word / Google Doc, then have some real examples to reference.

For our paid subscribers, we’ve aggregated our top example documents (including a starter valuation policy you can use) that are easy to download and use, as well as some additional insights: