#231 Valuation Playbook 2025: Trends, Techniques, and Policy Updates
Welcome back! As promised, today we’re diving deeper into valuation policies—specifically, how they’re applied in real scenarios and what adjustments funds are making in 2025.
Valuation Trends & Challenges in 2025
Quarterly valuations are something we do every 3 months. In 2025, we expect a few notable trends and challenges! Here are some current dynamics VC funds have to deal with:
Market Volatility: Fluctuating interest rates and sector-specific trends (AI) are complicating valuations. Many valuations rely on reference prices to major exchanges or securities which have shown more volatility lately. Funds must adapt quickly to these dynamics to maintain accuracy.
Stale Marks: Relying solely on the last funding round’s implied valuation can lead to inaccuracies as startups evolve or market conditions shift. A more dynamic approach is essential.
Techniques, Templates & Insights
Ok, let’s get tactical! For both new and established funds, a solid valuation policy is crucial. This ensures consistency and transparency in valuation approaches. We offer exclusive downloadable templates below and key insights to help craft or update valuation policies.
Starter Valuation Policy - If you’re forming a new fund, you need a starter valuation policy. Don’t worry, we’ve got you covered! This valuation policy details how a VC fund should approach valuations in a policy document. Instead of spinning your wheels thinking up creative language for your policy, start here! You can download this template below (paywalled).
What is ASC 820? - ASC 820 sets out how venture funds should determine and report the fair values of their portfolio companies. There are various ASC 820 valuation methods that venture funds can use—from discounted cash flow analyses to “backsolving” from the most recent post-money valuation to simply using the latest transaction price per share. In most cases, venture funds opt for the most straightforward method in determining valuations.
Strengthening our Valuation Policy (Blackbird, 2022) - The VC firm Blackbird released a valuation policy update in August 2022. This provides great context on general VC valuations and how a notable VC firm is navigating market swings. We appreciated their candid takes & insights!
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