Step-Up
Private Equity glossary · Accounting & LBO Flow Through
Definition
Increase in share price or valuation between successive funding rounds.
Step-Up in plain English
A step-up is the jump in a company's price or valuation from one fundraising round to the next — how much more each share is worth this time compared to last time. It's the number everyone watches because it shows whether the company is seen as more valuable as it grows, which rewards earlier investors who bought in cheaper. Think of a rare sneaker you bought for $100 that resells for $250 a year later — that increase is your step-up. A big step-up signals momentum and success; a flat or falling one (a 'down round') is usually a warning sign.
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