The markdowns have stunned many venture-capital investors and blindsided some executives at startups. Lower valuations by mutual funds could make it harder for all but the most successful companies to raise additional capital at richer prices and lead to more funding rounds at lower valuations. That can sap employee morale and hurt efforts to lure new hires with stock options. “That level of reporting and transparency has never really been a part of the [venture-capital] market, and all of a sudden it came out and it was a shock,” said Jeff Richards, a managing partner of GGV Capital, a venture-capital firm based in Menlo Park, Calif.

http://www.wsj.com/articles/mutual-funds-sour-on-startup-investments-1457043892