Metrics & Performance
Top Quartile
Funds whose returns rank in the top 25% of all funds from the same vintage year.
Top quartile refers to funds that perform in the top 25% of their peer group, typically measured against funds of the same vintage year and strategy. Top quartile performance is the minimum benchmark most institutional LPs target, as venture capital's illiquidity and risk profile require returns that significantly exceed public market alternatives.
In Practice
A 2018 vintage seed fund returning 4.2x net TVPI ranks in the top quartile, while the median 2018 fund returned 2.1x. The bottom quartile returned below 1.2x.
Why It Matters
The performance gap between top and bottom quartile VC funds is much wider than in other asset classes, making manager selection the single most important decision for VC allocators.
Related Concepts
Further Reading
Angel Investing Returns: What the Data Actually Shows
A data-driven look at angel investing performance — Kauffman Foundation research, AngelList data, power law dynamics, and the harsh portfolio math most angels never confront.
How Venture Capital Firms Actually Make Money
Management fees fund operations, carried interest creates wealth. The detailed math of a $200M fund, fee structures, and why fund size is the most important business decision a VC makes.
Portfolio Construction: How Top VCs Build Winning Funds
Check sizes, reserve ratios, concentration vs diversification, follow-on strategy—the math behind how top VCs structure their portfolios to maximize fund returns.
How VCs Source Deals: The Mechanics of Deal Flow
Inbound vs outbound, warm intros, scout networks, thesis-driven sourcing—here's how top-tier venture firms actually find the companies they invest in.
Building a Venture Capital Track Record From Zero
How emerging fund managers build a credible VC track record from scratch — angel investing strategies, attribution frameworks, and the path from first check to Fund I.
Why Most Venture Capital Funds Lose Money
The median VC fund barely returns invested capital. Here's why the power law makes venture so brutal, what separates winners from losers, and what the data actually shows.
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