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10 Reflections After 10 Years of NextView

View from Seed

One industry specific example is the strange fascination among some LPs and GPs around term IRR. Even though everyone knows that VC funds take 10+ years to come to fruition, one often can’t help but benchmark themselves based on IRR in the early days. My realization is that part of the negative bias comes from pedigree and success.

IRR 205
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10 Reflections After 10 Years of NextView

View from Seed

One industry specific example is the strange fascination among some LPs and GPs around term IRR. Even though everyone knows that VC funds take 10+ years to come to fruition, one often can’t help but benchmark themselves based on IRR in the early days. My realization is that part of the negative bias comes from pedigree and success.

IRR 156
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article thumbnail

10 Reflections After 10 Years of NextView

View from Seed

One industry specific example is the strange fascination among some LPs and GPs around term IRR. Even though everyone knows that VC funds take 10+ years to come to fruition, one often can’t help but benchmark themselves based on IRR in the early days. My realization is that part of the negative bias comes from pedigree and success.

IRR 136
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Flexible VC, a New Model for Companies Targeting Profitability

David Teten

That said, nothing is cost-free. More complex cost of capital calculation. 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. Transaction costs. Legal costs typically $5K-$50K .

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How Covid-19 Has Impacted VC Portfolios

View from Seed

Mid-stage portfolios can be more acutely impacted if many companies have fat cost structures and were investing heavily in growth that is not materializing. This may not hurt the ultimate exit value of these companies, but the passage of time will hurt the fund’s ultimate IRR. Reshuffling the deck.

Portfolio 215
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ESADE Business School Commencement Speech

Steve Blank

Unfortunately as we’ve learned from recent experience, using Return on Net Assets and IRR as proxies for efficiency and execution won’t save a company when their industry encounters creative disruption. For example they can reduce component cost, introduce a line extension or create new versions of the existing product.

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Cost ratios as a measure of fund efficiency

The Equity Kicker

fund expenses are largely composed of investors’ salaries and office costs, above a certain level higher salaries and nicer offices don’t translate into better performance. The definitive answer to these questions will come over time as our portfolio matures, our companies exit, and we can demonstrate a high cash to cash IRR.

Cost 60