How is fund NAV calculated?
Net asset value is the number a LP looks to when they want to know what their stake in a fund is worth. It is the fair value of what the fund holds, less what it owes, on a specific date.
A fund's net asset value is the fair value of everything it holds, mostly its portfolio positions, minus its liabilities, on a set date so GPs, LPs, and auditors are aligned to one number.
What net asset value actually measures
NAV is the fund's balance sheet expressed at fair value on a chosen date. On one side sit the assets, which for a venture fund means the portfolio positions, the cash the fund has called and not yet deployed, and any other amounts the fund is owed. On the other side sit the liabilities, mainly accrued management fees, unpaid expenses, prepaid capital contributions, and anything else the fund owes. Subtracting the second from the first gives you net asset value.
The phrase doing most of the work in that definition is fair value. Rather than carrying companies at what it paid for them, a fund carries them at what they are worth now, and for private positions that estimate takes real judgment. This is why two funds with the same similar Schedules of Investment (SOIs) can report very different NAVs.
What goes into NAV, line by line
| Component | What it covers |
|---|---|
| Portfolio positions | The fair value of each investment the fund holds, usually the largest piece of NAV. |
| Cash | Capital the fund has called and not yet deployed, plus any reserves it is holding. |
| Other assets | Amounts the fund is owed, such as receivables or prepaid expenses. |
| Liabilities | Accrued management fees, unpaid expenses, prepaid capital contributions, and any other amounts the fund owes. |
| Net asset value | Total assets at fair value, minus total liabilities, on the strike date. |
Gross NAV and Net NAV
People use NAV to mean a few different things, so it helps to be precise. Gross NAV reflects the fair value of the portfolio and other assets before fund-level economics. Net NAV is what remains after the liabilities, the accrued fees and expenses, and if the fund is in profit, the amount of that profit (carry) owed to the GP. It is the number that flows into each LP's capital account. When an LP asks what their position is worth, they usually mean their share of net NAV rather than the headline portfolio value.
How often NAV is calculated
Most venture funds calculate NAV quarterly, in step with their LP reporting. Some value monthly, and nearly all do a more rigorous valuation at year end, when the auditor tests the marks. The cadence follows the fund's reporting commitments rather than a single legal rule. What matters is that the date is fixed and the same basis is used every period, so the numbers are comparable quarter to quarter.
Where the judgment lives
The arithmetic of NAV is the straightforward part. What takes real work is valuing the private positions because most of a venture fund's worth sits in companies with no daily market price. A clear valuation policy, applied consistently, is what makes NAV defensible to an auditor and credible to an LP. We cover how those marks are set in the guide on how VC funds value portfolio companies.
NAV in practice
At Graph Advisors we treat NAV as a number that has to survive scrutiny rather than one dressed up to look good. Each quarterly or annual calculation ties back to a written valuation policy, the marks are supported before the quarter closes, and the same basis carries forward so LPs can compare periods without surprises. Alongside our clients, we have produced these numbers inside funds and sat across from the auditors who test them, and the habit that pays off most is doing the valuation work early instead of the week the report is due. A clean NAV is also what lets the administrator and the fractional CFO close the books without a scramble.
Frequently asked questions
What is a fund's NAV?
A fund's net asset value is the fair value of everything it holds, mostly its portfolio positions, minus its liabilities, struck on a set date so LPs and auditors share one agreed number. It is the fund's balance sheet expressed at fair value on that date.
How often is fund NAV calculated?
Most venture funds strike NAV quarterly, in line with LP reporting. Some funds value monthly, and many do a more rigorous valuation at year end alongside the audit. The cadence is set by the fund's reporting commitments rather than a single rule.
What is the difference between gross and net NAV?
Gross NAV reflects the fair value of the portfolio and other assets before fund-level economics. Net NAV, the number each LP cares about, is after liabilities such as accrued management fees and expenses, and it is what flows into each LP's capital account.
Who calculates a fund's NAV?
The fund administrator usually produces the NAV from the books, while the fractional CFO or finance lead owns the valuation policy and the judgment calls behind the private marks. The auditor tests both at year end.
Why does NAV depend on valuations?
Most of a venture fund's value sits in private companies with no daily market price, so NAV is only as solid as the fair value marks behind it. That is why a clear, consistent valuation policy matters as much as the arithmetic.
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