Metrics & Performance
Benchmark
A performance standard used to evaluate a fund's returns — typically the median or top-quartile IRR among peer funds of the same vintage year.
Benchmarking is the practice of comparing a VC fund's performance against peer funds of similar vintage year, stage focus, and geography. Key benchmarking providers include Cambridge Associates, Preqin, and Burgiss. Common benchmarks: top-quartile IRR (typically 25%+ for early-stage funds), public market equivalents (how the VC fund compares to the S&P 500 or Russell 2000 over the same period), and median TVPI (typically 1.5-2x for mature vintage years). LPs use benchmarks to evaluate whether their VC managers are outperforming alternatives. The power law nature of VC returns means that being in the top quartile is dramatically more valuable than being median — top-quartile funds are often 3-5x more profitable than median funds.