David Teten

JANUARY 19, 2021

Flexible VC creates early liquidity which can be either reinvested or distributed to LPs. This causes the cost of capital for Flexible VC, often calculated through IRR (similar to an interest rate), can be higher than that of venture debt or traditional RBI. 20-30% is a common target IRR for investors. Early liquidity.

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

Version One Ventures

SEPTEMBER 22, 2021

3x the invested capital net of fees over a period of about ten years for a net IRR in the low twenties). Note: TVPI stands for total value of investments net of fees / invested capital; DPI stands for distributions (= cash to LP’s) / invested capital). The chart below shows the numbers as of June 30, 2021. . .

Venture Capital 201

Venture Capital IRR Private Equity Seed Stage 201

View from Seed

JULY 15, 2020

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. As you can tell from my first two points, the effects of Covid have been quite unevenly distributed within a VC portfolio. Reshuffling the deck.

Portfolio 215

Portfolio IRR Dilution Distribution 215

VC Adventure

AUGUST 12, 2014

It’s a generalization but one that’s pretty well accepted in venture circles and it’s how many VCs describe target fund distribution, myself included. Correlation Ventures just released a study that shows the distribution of outcomes across over 21,000 financings and spanning the years 20014-2013. But does this heuristic match reality?

IRR 134

IRR Portfolio Distribution Venture Capital 134

VC Adventure

AUGUST 12, 2014

It’s a generalization but one that’s pretty well accepted in venture circles and it’s how many VCs describe target fund distribution, myself included. Correlation Ventures just released a study that shows the distribution of outcomes across over 21,000 financings and spanning the years 20014-2013. But does this heuristic match reality?

IRR 123

IRR Portfolio Distribution Finance 123

Both Sides of the Table

MAY 25, 2013

As you can see from the chart their data suggests there are about $25 billion of VC distributions per year in the US. The better way to think about VC returns is, do the firms consistently beat alternative asset clases on an IRR basis to adjust for the increased risk and lack of liquidity? The top 2% do not drive 98% of the returns.

LP 374

LP Later Stage IRR Term Sheet 374

This is going to be BIG.

JULY 30, 2015

Distributions can actually be drawn out over an extended period of time, but for the purposes of this exercise, I just kept the fund to 11 years. If you're following on in the A round, then you shed a full 500 basis points on your IRR. Time is the enemy of IRR. It's what you'd expect. That's if you're not following on.

Venture Capital 60

Venture Capital Pre-Money Valuation IRR Valuation 60

Andrew Payne

MARCH 25, 2009

Partnerships getting hit the hardest: those without some recent distributions (some are rumored to have nothing in the past 7-9 years!), those with no previous funds beating T-bill IRRs (or even showing a positive return), and those with heavy university endowment LPs (which have gotten slammed).

Venture Capital 40

Venture Capital IRR Capital Call Distribution 40

Feld Thoughts

APRIL 21, 2016

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. However, the DPI is the interesting number from a real perspective.

Marketing 70

Marketing Down Round Startup IRR 70

abovethecrowd.com

APRIL 20, 2016

Do you feel the need to raise more capital quickly before the prices erode further and bring down your IRR? Cash distributions are what matter at the end of the day, bug big paper gains still make for good fundraising pitches. Even though you know this may be bad for the company in the long run? LIMITED PARTNERS (LPS).

IPO 40

IPO Term Sheet Silicon Valley Valuation 40

Occam's Razor

OCTOBER 14, 2014

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%). And you also have, perhaps more useful, the industry wide acquisition strategy distribution. Any big shifts in investment (marketing, customer experience, team sizes, tools). And other such things.

Analytics 135

Analytics Vertical Metrics Web 135

Hunter Walker

MARCH 17, 2025

No reason to sell winners prematurely just because of original fund length, especially given our LPs are largely cash-on-cash return focused more than IRR. Exceeding our limits on company concentration and recycling – we are aggressive in using early liquidity to get more turns on the dollars rather than distribute.

IRR 83

IRR LP Institutional Investors Portfolio 83