Venture capital
InvestingDefinition
Equity financing of early-stage, high-growth private companies. Typically structured as preferred equity in a series (Seed, A, B, C…). Power-law returns: 20-30% of fund returns come from 1-2 winners; many investments go to zero.
Top-decile vintages have delivered 25%+ IRR; bottom decile losses. 2021 was a peak vintage; 2024-2025 returns from late-2021 funds are underwhelming as multiples compressed.
Top-decile vintages have delivered 25%+ IRR; bottom decile losses. 2021 was a peak vintage; 2024-2025 returns from late-2021 funds are underwhelming as multiples compressed.