Metrics & Performance
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
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.
In Practice
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 It 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.
VC Beast Take
In baseball, a .300 batting average makes you an All-Star. In VC, it makes you roughly average. The game isn't about not striking out — it's about home runs.
Related Concepts
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