VC tax loss harvesting? They need proof to mark down their investment to zero?

Most taxpayers have to realize the loss to take a tax deduction against their gains, but some tax elections allow you to do the same without finding a buyer for the worthless shares, which narrows down the incentives

Mark to Market election

as well as non-profits

some non-profit investors have stricter scrutiny as their charitable distribution requirement is based on net assets. so there is an incentive to arbitrarily mark malperforming investments down to lower values, but being able to get the business to announce their failure supports it better

Just thinking out loud