Coronavirus – Impact on Valuing Venture Capital Investments at March 31, 2020

The Covid-19 pandemic is impacting the global population and economy in unprecedented ways. As venture capital fund managers and corporate investors in non-traded or infrequently traded debt and equity investments exercise their fiduciary duty to report independent and credible fair value information to investors and stakeholders, significant informed judgement will be required. Government actions taken in response to the rapidly changing global health situation due to COVID-19, combined with public market volatility and the potential for a global recession make the judgments reached with respect to fair value at March 31, 2020 very difficult. Response to the crisis from a fair value perspective requires reasoned informed judgment to provide investors, stakeholders, and beneficiaries with decision useful information. Further, the current environment raises questions with respect to applying ASU 2016-01 for corporate venture investors.

Watch our webcast replay around how to reflect the impact of COVID-19 and current market conditions when estimating and reporting the fair value of early stage investments for the March 31, 2020 quarter end.

Originally presented on April 8, 2020.

Download webcast slides.

Duration: 75 minutes

Topics

• Can the price of a financing round that occurred pre-crisis be used to estimate fair value at March 31, 2020?
• How is the fair value of venture capital investments impacted by the pandemic and market volatility?
• How should actual portfolio company results for Q1 2020 impact fair value estimates at March 31, 2020?
• How should projected investee company value drivers impacted by the pandemic be reflected in estimating fair value (revenue, cost, growth, competition, market conditions, etc.)?
• Should projections be updated and what is the impact on fair value if they have not been updated?
• Applying ASU 2016-01 when measuring corporate investments at March 31, 2020
• Practical case studies focused on key fair value questions.
• What questions will LPs be asking with respect to March 31, 2020 fair value estimates?

Presenters

• David Larsen, Managing Director, Portfolio Valuation, U.S.
• Steven Nebb, Managing Director, Alternative Asset Advisory
• Greg Franceschi, Managing Director, Valuation Advisory Services
• Masa Noggle, Director, Alternative Asset Advisory
• Guannan Liu, Director, Alternative Asset Advisory

To avail CPE credit, please visit our CPE On Demand page.