Enhancing Investor Confidence with Real-Time Valuations in Private Markets
Investor confidence in private equity and venture capital depends on one thing above all, and that is the accuracy of valuations. Yet, inconsistent reporting continues to undermine trust.
These concerns are further heightened by the ongoing slowdown in exits. In the first half of 2025, US PE exits fell 24.07%. As a result, investors are left without reliable benchmarks to assess risk or plan capital deployment.
To ensure that these investor concerns are addressed, regulators and accounting bodies have tightened fair value standards over the years. But the growing consensus is clear. The industry needs more frequent, standardized, and transparent valuations to safeguard investors and sustain growth.
This is where the Real-Time Company Valuation Software developed by Eqvista, our partner, becomes invaluable for Startupr clients. Very few investments strengthen confidence and credibility as effectively as real-time and rigorous valuations.
Why Accurate Valuations Are Critical to Investor Relations
Accurate valuation reporting sits at the core of investor protection in private equity and venture capital. When valuations are opaque, inflated, or inconsistent, investors are deprived of the information needed to assess risks, compare opportunities, and safeguard their capital.
Hence, in the past two decades or so, we have seen regulatory scrutiny increase in hand with the rising standards of fair value measurement.
SEC’s Push for Regular Valuation Reporting
In 2023, the SEC introduced private fund adviser rules, which required quarterly statements on performance, fees, and expenses, effectively compelling regular valuation updates. These rules were later vacated in 2024.
SEC’s push for higher standards of private fund reporting might have been a response to the wave of inflated startup valuations in 2022, which left many investors unable to secure exits and has contributed to a slowdown in new capital deployment ever since.
How Accounting Standards Sparked the Drive for Transparency
One of the most pivotal changes came with the introduction of FAS 157, now codified as ASC 820, which took effect in late 2007. At the time, the subprime mortgage crisis was just taking shape. This accounting standard forced banks and financial institutions to recognize unrealized losses from their highly complex and illiquid assets. While critics argued that ASC 820 aggravated the crisis, it merely exposed a deeper problem. Investors had been left in the dark about the true risks hidden on balance sheets.
Building on this foundation, IFRS 13, issued in 2011 and effective from 2013, created a globally consistent framework for fair value measurement. For international investors, this made valuations more comparable across markets and reduced the room for manipulation.
In parallel, the Enron scandal prompted the US government to mandate fair market value measurement for stock-based compensation by introducing Section 409A to the Internal Revenue Code (IRC).
Valuations as the Foundation of Trust
From the dot-com bubble to the Global Financial Crisis, and the extreme lack of liquidity currently being experienced by venture capital investors, each episode illustrates the same principle. When valuations fail to reflect reality, investors pay the price.
The Case for More Rigorous Valuations in Private Equity and Venture Capital
Just as private equity exits appeared to be regaining momentum with a 16.63% increase in US PE exits during 2024, the first half of 2025 reversed course. This period recorded a steep 24.07% decline compared with the previous year.
For investors, this sharp contraction highlights a unique challenge. In an environment where liquidity is scarce, the ability to accurately assess the value and quality of portfolio holdings becomes even more critical. With limited deal activity, there are fewer comparable benchmarks to validate valuations, leaving investors uncertain about whether reported figures reflect true market conditions.
Lack of Standardized Valuation Processes
This information gap is compounded by the absence of standardized valuation reporting principles across private equity and venture capital. Different managers often employ varying methodologies, levels of disclosure, and update frequencies, which makes it difficult for limited partners to compare performance across funds or accurately gauge portfolio health.
The Limits of 409A Valuations in Reflecting True Value
While 409A valuations offer some structure by imposing a rigorous set of fair market value standards, they are not the ideal solution. By definition, 409A valuations exclude speculative assumptions about growth or acquisition potential. As a result, they often understate the value of early-stage startups where future prospects, not current fundamentals, drive investor interest.
Investor Sentiment: How Uncertainty Undermines Confidence
The cumulative effect is growing investor frustration. Arguably, there is a growing consensus that private equity and venture capital must adopt more frequent, transparent, and standardized valuation practices.
Without such reforms, investors are left making decisions in the dark, unable to measure risk accurately or plan exits effectively. Stronger valuation frameworks are no longer optional. They are essential for restoring confidence and sustaining capital inflows into private markets.
Breaking the Deadlock with Eqvista’s Real-Time Valuation Solution
Regulatory shifts, evolving accounting standards, and growing investor demands are converging toward one clear solution, which is real-time valuations in private equity. Historically, the absence of an active market meant private equity firms operated without a quoted share price, making it extremely challenging for investors to evaluate opportunities, monitor portfolio health, and plan exits with confidence.
With Eqvista’s Real-Time Company Valuation Software, this barrier is removed. The platform combines human expertise with the agility of AI, offering investors and companies valuations that are both rigorous and dynamic.
Eqvista’s models are designed in alignment with leading frameworks such as ASC 820, IFRS 13, and Section 409A. This ensures that real-time results are not only technologically advanced but also consistent with regulatory and accounting requirements.
The software delivers valuations that reflect current conditions, rather than outdated figures or static assumptions, by incorporating up-to-date market data and sector-specific benchmarks.
By adopting this solution, you can give investors tracking capabilities superior to the public markets, where prices often reflect short-term sentiment or inefficiencies.
Eqvista and Startupr – Partnering to Strengthen Growth and Investor Confidence!
Hong Kong’s corporate environment offers an ideal springboard for international expansion. The absence of capital gains tax makes it attractive for startups seeking to raise global capital while remaining insulated from regional funding downturns.
To truly seize this advantage, companies must align more closely with evolving investor expectations.
This is where the partnership between Eqvista and Startupr creates unique value. Startupr helps companies get incorporated and hit the ground running in Hong Kong, while Eqvista strengthens investor confidence through real-time valuations.
Together, we ensure that businesses are not only well-positioned to expand globally but also equipped with the tools to maintain transparent and enduring investor relationships.