EUVC VC | E478 | Size Matters… Or Does It? LP Strategies in the Micro vs Mega Fund Era
May 29, 2025
David Clark, Chief Investment Officer at Vencap, dives deep into the complexities of venture economics. He engages in a high-stakes debate about fund performance, stressing that drawing conclusions from current data is fraught with challenges. Topics like the new $20B benchmark for greatness, the hard math behind Seed-to-Series A attrition, and the ongoing debate about emerging managers’ true performance take center stage. The conversation uncovers the messy nature of current data, revealing that for many, early-stage investing remains a mix of art and science.
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Unreliable Data for VC Returns
- Public data on VC returns, especially for small funds, is unreliable and statistically insignificant.
- Early-stage investing has a low probability of hitting big outcomes, with only 15% seed-to-Series A progression recently.
Back Small, Early, Smart Funds
- Focus investing on small funds that invest early and smart for higher multiple returns.
- Having skin in the game in smaller, early-stage funds enables higher upside potential.
Scaling of Venture Exit Benchmarks
- The benchmark for a top venture exit has increased from $1B to $20B over 20 years.
- Larger funds need extremely outsized exits to hit performance benchmarks compared to smaller funds.