Fund Economics

Don't promise anything specific. This is a high-risk asset class. Instead, keep it high level and say something like: "It’s not uncommon for venture funds to target a 3-4x return in a medium scenario and 8x+ in a high scenario." This app...

Don't promise anything specific. This is a high-risk asset class. Instead, keep it high level and say something like: "It’s not uncommon for venture funds to target a 3-4x return in a medium scenario and 8x+ in a high scenario." This approach sets realistic expectations without overpromising.

Assessing capital requirements is the first step in a capital call process for a venture capital fund. Fund managers determine the need for additional capital, which may arise due to new investment opportunities or ongoing fund expenses,...

Assessing capital requirements is the first step in a capital call process for a venture capital fund. Fund managers determine the need for additional capital, which may arise due to new investment opportunities or ongoing fund expenses, such as management fees, legal and accounting fees, and other operational costs. This assessment is crucial to ensure the fund has sufficient capital to meet its investment objectives and cover its expenses.

Venture Capital is a long-term investment. VERY long term. If a fund gets an early exit, say within a year of investment, it's likely to be a bad investment such as an aquihire. It's improbable that a great exit that can return a pre-see...

Venture Capital is a long-term investment. VERY long term. If a fund gets an early exit, say within a year of investment, it's likely to be a bad investment such as an aquihire. It's improbable that a great exit that can return a pre-seed or seed fund will take place in 365 days post-investment. The most likely scenario is that the investments that will generate venture-style returns will take 10+ years to exit. This is why sophisticated LPs are unable to diligence 'track record' until the GP is on Fund 3/4. This is because good exits that generate venture-style returns often take a decade to generate DPI back to the fund. With this context in mind, a fund has not been significantly de-risked when an LP joins the fund a year after the 1st close. Sure, maybe LPs that join later closes can diligence some of the deals that the fund has done, as well as their operations, which can help them do better DD. But, from a returns perspective, there is not that much difference. By trying to penalize LPs that come into later closings, you're effectively shooting yourself in the foot because it's the large and more risk-averse LPs that often choose to invest at that stage. By creating this unnecessary friction to appease small HNW LPs who came into the 1st close and don't have enough context to evaluate if this is fair or not, you're making it harder for the larger and more sophisticated LPs to invest. 

There are no standards for returns in VC, because venture is an outlier business. This is also why most of the data online is not great, especially at the pre-seed or seed level.  If LPs are asking your for this info, you're in a bad pl...

There are no standards for returns in VC, because venture is an outlier business. This is also why most of the data online is not great, especially at the pre-seed or seed level.  If LPs are asking your for this info, you're in a bad place in your pitch, because that means they are not excited about what you're doing. So, they then have to try to compare asset classes etc.., which is not a debate that you can win. You can tell them that the VC asset class is the best performing one until you're blue in the face, but it will not matter, because they already made a decision not to invest.  Find your edge. It's because of this edge that you have the potential to produce outlier returns. Focus on that in the pitch. The performance of the asset class is irrelevant. This is not PE or public markets etc where the difference between a good GP and a great one is 10%. In venture, the difference between a good GP and a great one is 100%+.

You need to pick a model that fits your strategy, secret sauce, and stage. For example, if you invest in pre-seed, naturally you will lead to a more dispersed approach because the risk of the portfolio companies is so high. It's not unco...

You need to pick a model that fits your strategy, secret sauce, and stage. For example, if you invest in pre-seed, naturally you will lead to a more dispersed approach because the risk of the portfolio companies is so high. It's not uncommon for pre-seed funds to need to invest in 30-50 companies. However, just because that's the case in general, it doesn't mean that that's the case for everyone. 

There is no standard amount or numbers. What you're referring to here is having someone invest in the GP entity. First, you need to set a valuation on the GP entity. A good place to start is by trying to pencil out the value of the carry...

There is no standard amount or numbers. What you're referring to here is having someone invest in the GP entity. First, you need to set a valuation on the GP entity. A good place to start is by trying to pencil out the value of the carry if you 3x the fund. Then, you can work backward to determine how much $ a % of the GP is worth.  This transaction is typically not contingent on fundraising targets. Instead, an investor will buy a portion of your carry for a set amount, similar to how you would invest in a startup. If the fund fails, the investment in the GP goes to 0.  It is not very advantageous for investors to invest in the GP because they get paid last. The best place for investors to invest is the LP entity, because there they get paid first. Therefore, those who chose to invest in the GP vs the LP entity often do so because a) they want to help the manager and b) they want to get better economics on their initial LP investment. 

There are two reasons: • It extends the fund life. If you are on Fund 1, you want Fund 1 to get done fast so you can move to Fund 2. • It’s hard to explain to LPs. It will take the pitch away from the thesis and to a discussion about the...

There are two reasons: • It extends the fund life. If you are on Fund 1, you want Fund 1 to get done fast so you can move to Fund 2. • It’s hard to explain to LPs. It will take the pitch away from the thesis and to a discussion about the mechanics of recycling.

Most small funds can't have reserves. Reserves are viable around the $20m range. This is because, in many cases, just maintaining pro-rata in some of the winners can cost millions of dollars. So it's just not really viable for funds <$10...

Most small funds can't have reserves. Reserves are viable around the $20m range. This is because, in many cases, just maintaining pro-rata in some of the winners can cost millions of dollars. So it's just not really viable for funds <$10m and it's a sub-optimal strategy for Fund 1s. With Fund 1, you need to get it done, and move on to Fund 2 quick so that you're no longer a new manager. 

If have reached this point, you probably have lost this LP and are unlikely to be able to turn them around. That being said, here is what this LP is missing. Unlike the asset classes that this LP is citing, there is a MAJOR difference be...

If have reached this point, you probably have lost this LP and are unlikely to be able to turn them around. That being said, here is what this LP is missing. Unlike the asset classes that this LP is citing, there is a MAJOR difference between an exceptional VC and an ok one. For example, an OK outcome is the 2.5x that this LP is citing. However, it's not uncommon for great VCs to deliver 10x+ returns. It's also not uncommon for exceptional new and emerging managers with small funds like yours to deliver even greater returns if they are able invest in the right company. For example, if you can participate in the pre-seed round of the next Uber, that investment alone will likely 10x+ your entire fund even if all the other investments go to 0.  What you must do in situations like this is to turn the LP from trying to compare asset classes, to discussing potential outlier companies that you may be able to get them into. 

First, confirm that you and any other Managing Partners or General Partners (Partners) have the capacity to invest up to 1% or more of the Fund Size in cash or possibly in startup equity at cost. Next, confirm that all Partners can work ...

First, confirm that you and any other Managing Partners or General Partners (Partners) have the capacity to invest up to 1% or more of the Fund Size in cash or possibly in startup equity at cost. Next, confirm that all Partners can work between 9 and 18 months on fund formation without being fully compensated for that work, writing the name and the number of hours per week that each Partner can commit with limited or no compensation. Then, reflect upon the fact that each Partner is making a minimum of 12 year commitment to the firm, writing the name and the means by which you have validated the long-term commitment that each Partner has made. Finally, use an agreement like this one (https://vcl.to/mmm) to put finalize the scope for each partner. 

A fund has costs that are both one-time and recurring. A fund incurs one-time organizational expenses in the first year, usually in the form of legal, accounting, and state compliance expenses. Here are the vendors that typically make up...

A fund has costs that are both one-time and recurring. A fund incurs one-time organizational expenses in the first year, usually in the form of legal, accounting, and state compliance expenses. Here are the vendors that typically make up those expenses. • State domicile filing fees (eg: Delaware) • Blue Sky Fees (Filed with NASAA, fees based on state where LPs reside) • Form ADV Filing (IARD) • Legal formation fees (law firm or fund administrator) Typical estimates for organizational expenses for a small fund range from 50-100k. A fund also incurs recurring expenses to maintain and manage the funds starting in the first year. Broadly, they are called fund administration expenses and, for smaller funds, include at a minimum the following: • Annual Tax Preparation • CPA/Accountant for bookkeeping, financial statement prep • Legal Operations • KYC/AML and other compliance expenses • Treasury (banking) Typical estimates for the annual costs of a small fund range from 20-60k depending on the service provided.

Please review this article that specifies the Venture Capital management fee model. During the investment period, a $5m fund on a sliding scale management fee schedule generates ~$150,000 in yearly revenue from fees. This can typically s...

Please review this article that specifies the Venture Capital management fee model. During the investment period, a $5m fund on a sliding scale management fee schedule generates ~$150,000 in yearly revenue from fees. This can typically support 1 full time Managing Partner and one part time partner until they raise Fund 2.

The process to apply the Valuation Policy to a portfolio of 20 startups each quarter would involve several steps.  First, you would need to gather the latest financial and operational data from each startup. This could include recent fi...

The process to apply the Valuation Policy to a portfolio of 20 startups each quarter would involve several steps.  First, you would need to gather the latest financial and operational data from each startup. This could include recent financing rounds, revenue figures, and other key performance indicators.  Next, you would apply the valuation methodology outlined in the Valuation Policy to each startup. This could involve using market comparables, discounted cash flow analysis, or other valuation techniques.  After valuing each startup, you would update the portfolio's overall valuation. This process would be repeated each quarter to ensure the portfolio's valuation remains accurate and up-to-date.

At a minimum, portfolio companies should be reevaluated on a quarterly cadence. This ensures the most up to date metrics are being reported to Limited Partners.

At a minimum, portfolio companies should be reevaluated on a quarterly cadence. This ensures the most up to date metrics are being reported to Limited Partners.

Typically, VC Firms will determine a company's initial FMV as the cost in which it was purchase as the purchase price is usually done at the company's latest FMV.

Typically, VC Firms will determine a company's initial FMV as the cost in which it was purchase as the purchase price is usually done at the company's latest FMV.

Yes, investing via a SAFE (Simple Agreement for Future Equity) means that the investment won't have a set valuation until a future priced round - there is also no share price set during a seed round comprised of SAFEs.  The valuation (a...

Yes, investing via a SAFE (Simple Agreement for Future Equity) means that the investment won't have a set valuation until a future priced round - there is also no share price set during a seed round comprised of SAFEs.  The valuation (and thus price per share) is essentially deferred until more information is available, typically at the time of a preferred stock financing. The SAFE then converts into equity, usually preferred stock, at the predetermined terms, which often include a valuation cap or discount rate. 

TVPI - The amount of money distributed plus the fund’s unrealized value divided by the paid-in capital. RVPI - The amount of the fund’s unrealized value divided by the paid-in capital.

TVPI - The amount of money distributed plus the fund’s unrealized value divided by the paid-in capital. RVPI - The amount of the fund’s unrealized value divided by the paid-in capital.

Residual Value to Paid-In Capital (RVPI) is a term used to measure the residual value of a private equity fund as a multiple of the capital paid in by the investors. The residual value is the current fair value of all assets held by the ...

Residual Value to Paid-In Capital (RVPI) is a term used to measure the residual value of a private equity fund as a multiple of the capital paid in by the investors. The residual value is the current fair value of all assets held by the fund, while the paid-in capital by the investors is the total of all contributed capital up to that time. By itself, RVPI is a useful measure for investors in gauging the current value of a fund’s assets relative to the initial investment. RVPI also provides a perspective on how much value remains in the fund vs distributions the investor may already have received. RVPI can also be combined with the Distributed Value to Paid-in Capital (DPI) to assess the Total Value to Paid-in Capital (TVPI) of the fund. RVPI will change as the residual assets in the fund are valued each quarter. RVPI is also reduced as assets are realised through exits and capital is distributed to investors. A fund’s RVPI will therefore reduce to zero at the end of the fund’s life.

Your model largely depends on your strategy. It's sub-optimal to create a strategy based on a model. Instead, a model needs to based on the strategy. You can find a good model template here: https://foresight.is

Your model largely depends on your strategy. It's sub-optimal to create a strategy based on a model. Instead, a model needs to based on the strategy. You can find a good model template here: https://foresight.is

• Standard practice is to keep money in the fund account and deploy quickly to invest into companies.  • Investment instruments are not covered by the FDIC nor the CDIC. • First time fund managers for Fund I or Fund II should not have co...

• Standard practice is to keep money in the fund account and deploy quickly to invest into companies.  • Investment instruments are not covered by the FDIC nor the CDIC. • First time fund managers for Fund I or Fund II should not have consistent material funding amounts sitting idle in their accounts. Fund III and Fund IV are more aligned with a consideration for a "Sweep Repo" as this mechanism will require material cash minimums to maintain to actually benefit.   Deploying idle investment capital from LPs into investment instruments is NOT standard, so we don't recommend doing this until Fund III or Fund IV is being managed.

The table in this blog post is a good start: https://govclab.com/2022/11/07/managing-fund-expenses-for-venture-capitalists/ There are no best practices here. Every fund is different. For example, a Deep Tech fund many need to spend a lo...

The table in this blog post is a good start: https://govclab.com/2022/11/07/managing-fund-expenses-for-venture-capitalists/ There are no best practices here. Every fund is different. For example, a Deep Tech fund many need to spend a lot of money to perform heavy IP diligence on an investment and it may be justified as a fund expense. Another fund may be required by LPs to have an audit and that is also the justified as a fund expense. Finally, every fund expense has an opportunity cost because that is capital that could be deployed into a startup. Therefore, most new and emerging GPs with small fund-sizes that are optimized for the carry try to keep fund expenses to a minimum. 

There are lots of ways to go about this, but one good way is to start with the focus of the thesis. Then, segment the network around this focus. Next, try to identify founders within the network and people that can help those founders. F...

There are lots of ways to go about this, but one good way is to start with the focus of the thesis. Then, segment the network around this focus. Next, try to identify founders within the network and people that can help those founders. Finally, from the bottoms up try to calculate the value that those individuals can create together. 

It's not uncommon to see 10 - 20% of the carry with vesting and a cliff for an additional partner at this stage. Sometimes more. Use the guidlines of the Venture Share agreement: https://govclab.com/venture-share-2/ However, don't put a...

It's not uncommon to see 10 - 20% of the carry with vesting and a cliff for an additional partner at this stage. Sometimes more. Use the guidlines of the Venture Share agreement: https://govclab.com/venture-share-2/ However, don't put anything in writing. Once you come to terms verbally, then ask your Decile Partners team to help you get the agreements setup, check and update your cap-table and manage the process.

Correct - if you call 100% of their commitment over the 1st two years, then you would have money sitting in the fund's bank account for future management fee payments.

Correct - if you call 100% of their commitment over the 1st two years, then you would have money sitting in the fund's bank account for future management fee payments.

This will be covered in the second half of the VC Lab program and we'll provide all the templates etc...

This will be covered in the second half of the VC Lab program and we'll provide all the templates etc...

Typically, the fund and the accelerator are separate. The accelerator has it's own operational structure and generates revenue in a variety of ways, such as sponsorships etc... The fund is generally a classic 2 & 20 structure. The manage...

Typically, the fund and the accelerator are separate. The accelerator has it's own operational structure and generates revenue in a variety of ways, such as sponsorships etc... The fund is generally a classic 2 & 20 structure. The management fees for the fund can be passed down to the accelerator for additional revenue and it's not uncommon for these funds to charge 3.5% during the investment period and less during the rest of the fund life to average 2% over the 10 years.

A typical return on a 20 company portfolio may have 1 to 3 venture style exits if the manager is strong. There may be another few portfolio companies that get a multiple, and the rest are either a wash or a loss.

A typical return on a 20 company portfolio may have 1 to 3 venture style exits if the manager is strong. There may be another few portfolio companies that get a multiple, and the rest are either a wash or a loss.

The ownership target is dependent on the manager's thesis and their model. For example, at the pre-seed stage, it's very common to see a higher volume of investments to compensate for the risk. However, the average valuations of the inve...

The ownership target is dependent on the manager's thesis and their model. For example, at the pre-seed stage, it's very common to see a higher volume of investments to compensate for the risk. However, the average valuations of the investments will vary widley by the sector and region. For example, valuations are lower in emerging eco-systems vs established ones. I recommend you work backwards here. Start with understanding the average valuation in your eco-system. Then, review the exit values of previous startups that are on thesis. Next do some back of the napkin math to figure out what type of exit you would need for your average ticket to return 1-2x the entire fund size. Finally, use all of this information to figure out your ownership target. This approach will give you a good start. Then, you can take this to the next level by plugging into a more robust fund model like this one: https://foresight.is/vclab/model 

Start with fund models from Foresight https://foresight.is/venture-fund-model-annual/ Exit potential from pre-seed and seed is more art than science. You're looking for team and product potential to scale dramatically to dominate (or cre...

Start with fund models from Foresight https://foresight.is/venture-fund-model-annual/ Exit potential from pre-seed and seed is more art than science. You're looking for team and product potential to scale dramatically to dominate (or create and dominate) a large market segment, with all the steps along the way including likely raising substantial additional capital. CrunchBase, PitchBook and CBInsights can provide data on successful exits, though M&A data can be sparse. Can you discern potential from a deck - maybe, though most likely not. 75-90% of seed startups fail. As a VC, your job is to spot and nurture the true potential of companies, sometimes the deck sucks and you need to look deeper. Emerging managers outperform as they can look deeper and apply domain expertise to find the rockstars, rather than delegating filtering to associates.

There are a number of factors that affect capital call schedules, including if the fund is fully subscribed or not, that greatly affect one's capital call planing. As a result, there is no 'rule of thumb'. Please read this article for fu...

There are a number of factors that affect capital call schedules, including if the fund is fully subscribed or not, that greatly affect one's capital call planing. As a result, there is no 'rule of thumb'. Please read this article for further information on this topic:  https://govclab.com/2023/05/07/vc-capital-calls/

On a high level, first time managers need to be able to demonstrate to LPs that they: • Invested in amazing companies in Fund 1  • They subscribed their target fund size • They operated their fund to the highest standards

On a high level, first time managers need to be able to demonstrate to LPs that they: • Invested in amazing companies in Fund 1  • They subscribed their target fund size • They operated their fund to the highest standards

Venture Capital is a RISK asset class and a very optimistic style of investing. The objective of venture capitalists is to fund category defining startups with the potential to return the entire fund or more given that on average the maj...

Venture Capital is a RISK asset class and a very optimistic style of investing. The objective of venture capitalists is to fund category defining startups with the potential to return the entire fund or more given that on average the majority of the portfolio companies will fail. A VC does 'mitigate some risk' by investing in a portfolio of companies. However, the expectation is that 1-3 of the companies will drive the majority of the returns in the portfolio. 

Venture Capital is a RISK asset class and a very optimistic style of investing. The objective of venture capitalists is to fund category defining startups, and by definition, it's really difficult to spot these companies if one is bearis...

Venture Capital is a RISK asset class and a very optimistic style of investing. The objective of venture capitalists is to fund category defining startups, and by definition, it's really difficult to spot these companies if one is bearish on the future prospects of the market. In other-words, venture capital is the R&D finance vehicle for the innovation of the future.  How to build a VC fund model: https://govclab.com/2022/05/05/how-to-build-a-vc-fund-model/

There are lots of funds with an Impact thesis that are over-performing while others under perform. They follow a Pareto distribution for returns just like all other funds.

There are lots of funds with an Impact thesis that are over-performing while others under perform. They follow a Pareto distribution for returns just like all other funds.

You need to create all 3 entities at the same time, including the ManCo. The distribution strategy referred to in Sprint 9 (https://vcl.to/ManCo-strategy), refers to how the ManCo will be setup to distribute fees and cary to the managing...

You need to create all 3 entities at the same time, including the ManCo. The distribution strategy referred to in Sprint 9 (https://vcl.to/ManCo-strategy), refers to how the ManCo will be setup to distribute fees and cary to the managing partners and potential employees. 

For emerging managers, generally - no, the carry structure should be as follows: First, return 100% to each Partner until the amount distributed equals the Capital Contribution Value for each Partner for the exited investment, Fund Expe...

For emerging managers, generally - no, the carry structure should be as follows: First, return 100% to each Partner until the amount distributed equals the Capital Contribution Value for each Partner for the exited investment, Fund Expenses, and Realized Investments. Then, Carried Interest % to GP and LP % to LPs for the exited investment. This is used as it can be unfair for smaller funds to wait until the entire fund is returned before they are in the carry, and the existing carry structure creates maximum alignment around the Fund providing top decile performance.  A hurdle rate is uncommon in VC in the US, especially at smaller funds, as the main form of compensation is carry and it doesn’t significantly de-risk the fund.

Generally, no - an emerging, smaller Fund should not support a yearly audit request.  Since the goal is to maximize the returns for LPs, it is preferred to use as much of LP's capital as possible to make investments rather than on fund ...

Generally, no - an emerging, smaller Fund should not support a yearly audit request.  Since the goal is to maximize the returns for LPs, it is preferred to use as much of LP's capital as possible to make investments rather than on fund expenses. However, our tax partner, Spicer Jeffries, can do an audit every year. It is not very common for smaller funds to have audits and we strongly recommend against an audit due to the expense and extra lift required for reporting.

Please reference: Venture Capital Management Fee Model. If you are working with Decile Partners, and you would like to adjust your management fee schedule per this article, please contact your Venture Associate. 

Please reference: Venture Capital Management Fee Model. If you are working with Decile Partners, and you would like to adjust your management fee schedule per this article, please contact your Venture Associate. 

Here is a great model that we recommend which is part of the VC Lab curriculum: https://foresight.is

Here is a great model that we recommend which is part of the VC Lab curriculum: https://foresight.is

Management fees are typically paid on the basis of committed capital. Fees are normally drawn from the called capital, which will be defined in the LPA. You may find this article, this article and this article helpful. 

Management fees are typically paid on the basis of committed capital. Fees are normally drawn from the called capital, which will be defined in the LPA. You may find this article, this article and this article helpful. 

We recommend that you review VC Lab's Venture Share agreement. Principal level can receive anywhere from strategic to executive level compensation based on the recommended chart.

We recommend that you review VC Lab's Venture Share agreement. Principal level can receive anywhere from strategic to executive level compensation based on the recommended chart.

Yes. The goal is to establish a multi-fund relationship, where the carry declines from 5%, 4% and then 3% for each subsequent fund.

Yes. The goal is to establish a multi-fund relationship, where the carry declines from 5%, 4% and then 3% for each subsequent fund.

Management Fees are not related to the GP investment nor any Carried Interest paid to the GP.

Management Fees are not related to the GP investment nor any Carried Interest paid to the GP.

This really depends on how many deals that you are going to be doing per year. If you assume 8 deals per year with $5K to $10K per deal, depending on complexity, plus random other needs, then you could be at $50K to $100K per year.

This really depends on how many deals that you are going to be doing per year. If you assume 8 deals per year with $5K to $10K per deal, depending on complexity, plus random other needs, then you could be at $50K to $100K per year.

The distribution waterfall is a methodology for splitting distributions between the GP entity and Limited Partners. Typically, the GP takes 20% carried interest on profits. The distribution waterfall outlines how and when this carried in...

The distribution waterfall is a methodology for splitting distributions between the GP entity and Limited Partners. Typically, the GP takes 20% carried interest on profits. The distribution waterfall outlines how and when this carried interest is allocated. An American waterfall refers to a deal-by-deal method of allocating carried interest. This means that the GP entity receives carry on a deal-by-deal basis before investors are made whole overall. This allows the GP to receive carried interest sooner. The American waterfall is juxtaposed with the European waterfall with is a method by which all Limited Partners’ capital contributions (including unrealized investments) have been repaid before the GP entity receives its carried interest. While the American waterfall allows you to take carry earlier usually, in practice, you should not take the entirety of your share of carried interest until Limited Partners are made whole to avoid having to clawback the GP carried interest.

A metric of the ratio of Total Value of a fund based on valuation of the investments relative to the Paid-In capital. This is often used as an interim indicator of fund performance. TVPI is basically equivalent to MOIC. TVPI is calculat...

A metric of the ratio of Total Value of a fund based on valuation of the investments relative to the Paid-In capital. This is often used as an interim indicator of fund performance. TVPI is basically equivalent to MOIC. TVPI is calculated as the sum of the realized return and the remaining unrealized return divided by the total capital paid in to the investment. Here's the formula for TVPI: TVPI = (Realized Value + Residual Value) / Total Paid-In Capital In a simplified example, suppose a venture capitalist (VC) invested $5 million in a tech startup. 1. Realized Value: After two years, the VC sold a portion of their shares for $3 million. This amount is the realized value. 2. Residual Value: The VC still owns some shares in the startup, which are currently valued at $4 million. This amount is the residual or unrealized value. 3. Total Paid-In Capital: This is the initial amount that the VC invested in the startup, which in this case is $5 million. So we can plug these numbers into the formula to calculate the TVPI: TVPI = ($3 million Realized + $4 million Residual) / $5 million Paid-In Capital TVPI = $7 million / $5 million TVPI = 1.4x The TVPI of 1.4x means that for each dollar invested, the VC has so far received 1.4 times that amount back in realized value, and still has additional unrealized value remaining in the investment.

One very large return drives the overall results. Why VC funds are looking for outliers.

One very large return drives the overall results. Why VC funds are looking for outliers.