TLDR:
- The median 2017 fund in the VC industry is not meeting its goal of 4x TVPI.
- Despite good times for investment in 2017-2018, many funds are falling short of expectations.
Just Being Pretty Good at Venture Capital Isn’t Good Enough by Jason Lemkin
Carta has shared data on VC performance, revealing that the median 2017 fund is 7 years into a 10-14-year lifetime but is only at 1.8x TVPI. Adjusting for fees, this brings it closer to 1.4x for the Limited Partners. To beat Nasdaq, a fund would need to reach 4x TVPI, translating to 3x after fees for investors. However, most funds are falling short of this goal, showcasing the difficulty of succeeding in venture. Despite the favorable investment climate in 2017-2018, many funds are struggling to meet expectations. Even funds from 2020 and 2021 are showing less promising results. This highlights the challenges faced by founders in the VC industry.
