Understanding Venture Capital Metrics

This chapter explores key financial metrics in venture capital, focusing on metrics like MOIC and TVPI, which are crucial for limited partners. The discussion emphasizes the significance of actual cash returns over reported figures and highlights the value of Public Market Equivalent (PME) as a comparative measure for evaluating venture capital investments against public market returns. Additionally, the chapter addresses investment strategies, illustrating the importance of time diversity in capital deployment to mitigate risks in volatile markets.