Fund Structure
Last updated
Quick Answer
The length of time an investor holds an investment before exiting, typically 5-10 years in venture capital.
Holding period is the duration between initial investment and exit. In VC, the median holding period has lengthened from 5-7 years to 7-10 years as companies stay private longer. Longer holding periods affect IRR calculations and LP liquidity expectations.
In Practice
The fund's average holding period was 8.3 years — investments made in 2018 were still unrealized in 2026, with exits expected in 2028-2030.
Why It Matters
Longer holding periods reduce IRR even if total returns are high, because time is in the denominator. This has implications for fund structure, LP expectations, and GP incentives.
VC Beast Take
The holding period in venture keeps getting longer. At some point, 'venture capital' became 'really patient capital.' Your LPs better be okay with that.
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Holding period is the duration between initial investment and exit. In VC, the median holding period has lengthened from 5-7 years to 7-10 years as companies stay private longer. Longer holding periods affect IRR calculations and LP liquidity expectations.
Understanding Holding Period is critical for founders navigating the fundraising process. It directly impacts deal terms, valuation, and the relationship between founders and investors.
Holding Period falls under the fund-structure category in venture capital. This area covers concepts related to how venture capital funds are organized, managed, and governed.
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