Hey guys
I'm new to the platform and have completed my second year in the industry, so forgive me if my question seems obvious.
I work in the fund of funds team of an institutional investor and I'm currently covering a growth equity fund that reports the value of its portfolio companies using the "Guidelines Transactions Method" which, as I understand it, is based on the share price of the latest financing round. The thing is, for some of these companies, the latest financing round has occurred between 2-3 years ago. The firm claims that this approach is widely accepted under ASC 820. However, my hunch tells me that so many things can occur in a year or more that changes the intrinsic value of a company.
Am I right to be skeptical around GTMs? Is this something that is widely accepted in growth equity?
I'd be grateful to hear your thoughts
-Good Vibes Only
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