net worth is the accumulation of all the assets you have, including cash and the paper worth of the equity in your startup, less your liabilities (debt). so it'

net worth is the accumulation of all the assets you have, including cash and the paper worth of the equity in your startup, less your liabilities (debt). so it's more appropriate to couch this in terms of asset liquidity, and secondarily, the riskiness of that asset. as you allude to, the hard part is properly discounting an illiquid and risky asset (like the paper valuation of a startup) based on your risk tolerance so that you can adjust your finances accordingly. what many new founders don't realize is that a startup is an undiversified investment. they are all-in on a single asset and that's very risky.