Venture Capital Returns: Early Stage Funds vs. Venture Funds with No Specific Stage Focus

by Bronwyn Williams

  • 07 May 2010
  • PE

Comparing the median returns of venture funds with an early stage focus against venture funds with no specific stage focus, it is clear the returns are closely correlated with the exception of a few vintages. Vintage 1996 early stage-focused funds show a median return of 61.1% whereas those funds with no specific stage focus show a return of 14.0%. IRRs are in the red for both venture types for funds with a vintage of 1999 and later as these funds are the most affected by the dot-com bubble. Vintage 2002 funds show an exception to this trend as the median IRRs for both venture types are positive. More recent vintages of 2006 and 2007 are showing some of the lowest returns but as these funds are in the early stages of their investment cycle it is possible their performance will improve as their investments mature.

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