How AI is Shaping the Future of Venture Capital
RSVP for April 30th
1

Asked by

Community Member

on

in

General VC Questions

Why did my IRR go down significantly in Q1 despite portfolio markups?

My IRR had been climbing for all of 2023 and in Q1 of 2024 it went down significantly.  Despite one company having a 2x markup in the quarter.  There were no significant cash flows out, no new investments nor any large expenses. 
1 See in Base
0

Answered by

Rob Del Prete

on

IRR takes into account contributions and distributions at the time of their recording; regardless of cash flow. Also, it takes into account any accrued income or expenses at the time of recording. When larger expenses are accrued, it can drag down the IRR in the short term and should gradually fix itself over time.

Join the Leaders of Venture 2.0

Our graduates are creating disruptive capital with exceptional expertise, ethical investing practices, and exceptional returns. Whether you're launching your first fund or scaling an established firm, VC Lab provides the tools, network, and support needed to succeed in today's venture landscape.

Apply Now
How do I start raising my first venture fund? What are the key considerations for becoming a Limited Partner?
How can I improve my emerging manager firm's deal flow? What strategies help attract institutional LPs?
How do I build a compelling investment thesis? What are best practices for portfolio management?
How can I differentiate my VC firm in a crowded market? What are the typical fund terms for emerging managers?