#Venture capital fund performance series#

#Venture capital fund performance series#

Note: What about new or “emerging” managers without an official track record? Answer: If a fund manager has never operated his or her “own” fund before, you can often still look at a track record of their attributed deals at a prior fund, or a series of non-fund investments they might have made as a scout or angel investor. While past performance is never a guarantee of future results, it is often a key starting point for setting return expectations and making investment/allocation decisions. Often, the first question investors ask of a fund manager is, “ What is your track record?” How should you measure VC fund performance? But there are a few ways investors can track the performance of a particular fund. It can be hard to gauge how well a VC fund has performed in the past and whether it would make a good investment in the future. Fortunately, there are a few ways investors can track the performance of a particular fund, using that knowledge to inform their investment decisions for the future. But if you're considering investing, it can be hard to gauge an individual fund. Over the last decade, venture capital funds have outperformed the S&P 500 by 5-15% annually.

For proven managers, there are a few metrics that investors can use to compare fund performance-namely, return Multiples and IRR. In those cases, you should look closely at the reputation and proposed strategy of the manager. ‍ TL DR: Measuring VC fund performance can be difficult, especially when it comes to an unproven manager with no track record.

None of this article is financial advice, but if you are looking for modeling tools or human advisors to help you through this decision, we can help. If you’re interested in investing in venture capital or other alternatives (and are an accredited investor), Compound can help.