To play devil&#x27;s advocate a bit here, the companies that are being devalued (on paper) are by definition the so-called &quot;unicorns&quot;, or the outliers that VCs depend on to offset losses to their duds.  So if you start knocking off double-digit percentages from a few of these outliers, pretty quickly your portfolio takes a huge hit.<p>Hypothetical situation with some seriously made-up numbers:<p>* 2x $100k for 5% investment in companies at say a diluted stake of 2% goes from $10B to 5B<p>* 5x $100k for 5% investment in companies who go bust<p>* 3x $100k for 5% investment in companies who are acquired, make 10% returns ($110k per).<p>Total investment: $1m<p>Return from non-outliers: (5 x $0) + (3 x $110k) =&gt; $330k for a net of -$570k<p>Return from outliers before devaluation (on paper): 2 x .02 x $10B =&gt; $400M<p>Return from outliers after devaluation (on paper): 2 x .02 x $5B =&gt; $200M<p>At this point, the losses&#x2F;returns of the non-outliers are in the noise.  But man, it hurts to have to explain the &quot;loss&quot; of your upside by such an enormous amount.  I don&#x27;t think VCs would shrug it off as just a part of their overall portfolio, since these are the valuations that prop up the overall performance.