Venture Capital Performance Varies by Vintage Year
- Vintage year significantly impacts top-decile performance
- In strong bull markets top-decile funds achieve higher TVPI/DPI/IRR than in weaker markets
Fund Stage Affects Metrics
- Early-stage funds (pre-seed/ seed):
- Often have higher TVPI, DPI and IRR because they target companies with exponential growth potential
- TVPI: 3x-5x, with outliers hitting 10x+
- DPI: 1x-3x+, as distributions often lag behind unrealized value
- IRR: 25%-40%, but some vintage years and markets can push this higher
- Later-stage funds (growth/late-stage):
- Have lower top-decile metrics because investments are closer to exit and valuations are more stable
- TVPI: 2x-3x
- DPI 1.5x-3x reflecting faster distributions
- IRR: 15%-25%, as shorter holding periods reduce compounding potential but improve cash efficiency
- Definitions are Contextual:
- Top decile represents the top 10% funds by performance in each dataset or market environment
- Often have higher TVPI, DPI and IRR because they target companies with exponential growth potential
- TVPI: 3x-5x, with outliers hitting 10x+
- DPI: 1x-3x+, as distributions often lag behind unrealized value
- IRR: 25%-40%, but some vintage years and markets can push this higher
- Have lower top-decile metrics because investments are closer to exit and valuations are more stable
- TVPI: 2x-3x
- DPI 1.5x-3x reflecting faster distributions
- IRR: 15%-25%, as shorter holding periods reduce compounding potential but improve cash efficiency
- Top decile represents the top 10% funds by performance in each dataset or market environment
Does the information in the table represent global or USA metrics?
The best data for earlier vintages is US and for later vintages both US and Europe. There is not reliable global data.