Both Sides of the Table

SEPTEMBER 15, 2022

IRRs work really well in a 12-year bull market but VCs have to make money in good markets and bad. For Upfront Ventures, across > 25 years of investing in any given fund 5–8 investments will return more than 80% of all distributions and it’s generally out of 30–40 investments. It’s just math. So it’s about 20%. And we’re patient.

Technical Review 416

Technical Review Pre-Money Valuation San Francisco Valuation 416

David Teten

JANUARY 19, 2021

Yes, via conversion rights at a valuation cap. Yes, via conversion rights at a valuation cap. Flexible VC creates early liquidity which can be either reinvested or distributed to LPs. 20-30% is a common target IRR for investors. Flexible VC: Compensation-based. 2-5x return cap + path to uncapped equity returns.

Cofounder 78

Cofounder Technical Review Equity Dividend 78

Tim Keane

JANUARY 12, 2010

If you look at the spreadsheet, you will see that the “Required Rate of Return” is expressed as an IRR.   Internal Rates of Return naturally compound, so a 50% IRR is 7.59   (If you plug in an IRR of 58.5%   Internal Rates of Return naturally compound, so a 50% IRR is 7.59 times at 5 years and 11.39

Term Sheet 68

Term Sheet Valuation Dividend Liquidation Preference 68

View from Seed

JULY 15, 2020

One topic of conversation among VC’s over the last few months is how their portfolios are faring during the Covid pandemic. This may not hurt the ultimate exit value of these companies, but the passage of time will hurt the fund’s ultimate IRR. Unevenly distributed, but broadly optimistic. Reshuffling the deck.

Portfolio 215

Portfolio IRR Dilution Distribution 215

Occam's Razor

OCTOBER 14, 2014

Outcomes of the conversations with your Finance team and Sr. Leaders (company is leaving China, our IPO is next week, 1,800 new stores are being opened in 180 days, our new IRR is 8%). Conversion rate is one of those metrics that I strongly encourage you only create benchmarks for from your own data. And other such things.

Analytics 135

Analytics Vertical Metrics Web 135

Feld Thoughts

APRIL 21, 2016

” Fred and I have had some version of this conversation many times over the past twenty years as we both strongly believe the punch line. As Bill points out, many funds are sitting on huge paper gains which translate into large TVPI, MOC, gross IRR, or whatever the current trendy way to measure things are.

Marketing 70

Marketing Down Round Startup IRR 70