David Teten

MARCH 2, 2013

The Kauffman Foundation points out several reasons why they choose to keep pouring capital into the industry: the J-curve narrative, VC investment allocation mandates (which should disproportionally benefit large funds), the “relationship business” philosophy, and potentially misleading return metrics (such as IRR).

LP 114

LP Securities and Exchange Commission Silicon Valley Venture Capital 114

Agile VC

NOVEMBER 13, 2012

For those who aren’t familiar, Mobius was a VC fund with offices in Silicon Valley and Boulder CO and at it’s peak Mobius had $2B+ under management. a VC fund’s entire portfolio in aggregate, net of management fees and carried interest) a good return from an LP’s perspective would be 2.5-3.0x

LP 154

LP Portfolio Venture Capital IRR 154

K9 Ventures

NOVEMBER 30, 2008

In return for the operational role the GPs play, their firm receives a Management Fee. Industry averages for the management fee are expected to be around 2.5% In addition, there is a performance incentive — the Carried Interest or Carry. The carry is typically around 20% of any gains on the fund.

IRR 48

IRR Venture Capital LP Early Stage 48