Venture Capital Returns Reference
Direct answer: Venture capital returns follow a power law: a small number of investments (often 1-3 per fund) drive the majority of returns. Top-quartile VC funds have returned 25-40% IRR over 20 years, but median VC has barely outperformed public markets after accounting for illiquidity, with many fund vintages returning less than the S&P 500.
VC Performance by Stage and Vintage (10-Year Rolling, through 2024)
| Stage | Median Net IRR | Top Quartile IRR | Loss Ratio | Avg Fund Size | Time to Liquidity |
|---|---|---|---|---|---|
| Pre-Seed/Angel | 15-25%* | 40-80%* | 60-75% | $5M-$25M | 10-15 years |
| Seed | 12-18% | 30-50% | 55-70% | $30M-$150M | 8-12 years |
| Series A (Early VC) | 11-16% | 25-40% | 45-60% | $100M-$400M | 7-10 years |
| Series B/C (Late VC) | 10-14% | 20-30% | 35-50% | $300M-$1B | 5-8 years |
| Growth Equity | 13-17% | 22-30% | 25-40% | $500M-$2B | 4-7 years |
| 2020-2022 Vintages | 5-8%** | 15-25%** | Higher | Varies | TBD |
Source: Cambridge Associates VC benchmarks; Kauffman Foundation research. *Angel/pre-seed estimates. **Early indication only. Last verified: September 2026.
Frequently Asked Questions
What is the power law in venture capital?
In VC, a tiny fraction of investments (often 1-2 per fund, maybe 5%) generate the majority of a fund's total returns. Most VC investments lose money or return less than invested. A successful fund typically needs one investment returning 10-50x to overcome the losses on the rest. This is why portfolio size and the ability to make follow-on investments in winners matter enormously.
What makes a top-quartile VC fund?
Top quartile VC funds tend to be either very early-stage (catching companies before valuations inflated), deeply specialized in a sector, or operated by former founders with unique access to deal flow. Fund size matters: the largest funds find it harder to return multiples because a $100M exit is irrelevant to a $5B fund but transformative for a $50M fund.
Can retail investors access venture capital?
Accredited investors can invest in VC funds via AngelList, Republic, or equity crowdfunding platforms, though minimums and illiquidity remain barriers. The JOBS Act expanded access, allowing non-accredited investors to invest small amounts in startups, but VC fund access typically still requires $50K-$250K minimums and accredited status.