Venture capital firms are notoriously secretive about their returns. Industry watchers rely on the occasional releases from public pension systems, like Calpers. See this link
which includes returns data for funds from well-known firms like Index, Foundry, Highland & Upfront.
This week, the WSJ got hold of the returns data for Andreesen Horowitz, a top venture fund. The paper found that the returns weren’t quite as high as one might want to believe
: 42% IRR for Fund I; 25% for Fund 2; 27% for Fund 3. These are still great numbers, considering holding government bonds costs you money. But in some cases, Andreesen’s returns seemed below top quartile benchmarks for VC as an asset class.
💡 Andreesen Horowitz responded with a clearly stated argument
which outlines some fascinating intricacies of fund accounting. Ultimately only cash distributions matter. RECOMMENDED