Metrics & Performance
Last updated
Quick Answer
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.
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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...
Understanding Top Quartile is critical for founders navigating the fundraising process. It directly impacts deal terms, valuation, and the relationship between founders and investors.
Top Quartile falls under the metrics category in venture capital. This area covers concepts related to the quantitative measures used to evaluate fund and company performance.
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