Formula
How to Calculate Batting Average
The percentage of a VC's investments that generate positive returns, as opposed to partial or total losses.
VC Batting Average
Batting Average = Profitable Exits / Total Investments
Where
- Profitable Exits
- = Number of investments returning > 1x
- Total
- = Total number of portfolio companies
What Is Batting Average?
A VC's batting average measures what fraction of their portfolio companies return more than the invested capital. While important, batting average is less meaningful than magnitude of winners in venture — a fund can have a low batting average but exceptional returns if it catches a single outlier.
Worked Example
A fund with a 30% batting average (7 of 10 investments lost money) still returned 5x because one company returned 40x the initial investment.
Why Batting Average Matters
Batting average helps contextualize a VC's judgment, but power law dynamics mean one massive winner can overshadow many losses. Both consistency and outlier-hunting matter.
Related Terms
Frequently Asked Questions
How do you calculate Batting Average?
Batting Average is calculated using the formula: Batting Average = Profitable Exits / Total Investments. The percentage of a VC's investments that generate positive returns, as opposed to partial or total losses.
What is a good Batting Average?
What constitutes a "good" Batting Average depends on context — the fund's stage, vintage year, and strategy. Check our benchmarks and calculators for specific ranges.