Fund performance: Returns for 281 recent-vintage venture funds

Venture capital returns are known to show a wide dispersion.

This is certainly true of the returns of 281 recent vintage funds collected by Venture Capital Journal (and displayed in a chart at the bottom of this story).

The returns range from an IRR of 67.60 percent, earned by Union Square Ventures 2004, the top fund of the bunch, to the -73.60 reported for ITU Ventures III. The median for the group is 8.30 percent.

What’s perhaps most encouraging is that nearly two in five funds have IRRs in the double digits, and of these, nearly a third are at 20 percent or above. That’s significantly higher than the 30 percent of funds stuck in the single digits.

Less encouraging are the 20 percent of funds under water with negative IRRs or investment multiples below zero.

The funds are gathered from the performance reports of 47 public pensions and related organizations, as curated by VCJ Research Editor Paul Centopani.

The organizations include top investors, such as the California Public Employees’ Retirement System, California State Teachers’ Retirement System, Canada Pension Plan Investment Board, Chicago Teachers’ Pension Fund, Employees’ Retirement System of Hawaii, Houston Police Officers’ Pension System, Los Angeles City Employees’ Retirement System, University of Texas Investment Management Company and Washington State Investment Board.

Most of the reports date to late 2016, though some are current to the early months of 2017.

At the top of the list are funds from such firms as Union Square Ventures, Flagship Ventures, Menlo Ventures, Spark Capital, Emergence Capital Partners, Foundry Group, IA Ventures, Third Rock Ventures, ARCH Venture Partners and FirstMark Capital.

Following Union Squares’ 2004 fund in the rankings are a pair of well performing funds, Flagship Ventures Fund IV, which as of December had an IRR of 63.50 percent, and Menlo Ventures XI, with the same IRR, updated through June 2016.

Union Square holds fourth place as well as first with its Opportunity Fund, which had an IRR of 60.90 percent as of December.

Next on the list is Spark Capital II, in sixth place, with an IRR of 51.96 percent as of December, followed by Emergence Capital Partners II, with an IRR of 46.40 percent.

The rest of the funds can be found in the large downloadable table: Returns for 281 Venture Capital Funds (Vintages 2003 to 2012)