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Fund Vintage
The year a venture fund began investing, used to compare performance across different market cycles.
Formula
Vintage performance comparison:
- 2010 vintage average TVPI: 2.5x
- 2015 vintage average TVPI: 1.8x
- 2020 vintage average TVPI: 1.4x (still early)
Compare within vintage, not across.
Definition
What is Fund Vintage?
Vintage year is when a fund started deploying capital. It matters because market conditions vary dramatically year to year. A 2009 vintage fund had different opportunities than a 2021 vintage fund.
Why Vintage Matters
You can't compare raw returns across vintages. A 2020 fund showing 3x might underperform a 2015 fund showing 2.5x because of market timing. Industry benchmarks are always vintage-adjusted.
Vintage Effect
Early-cycle vintages (after market corrections) often outperform. Late-cycle vintages (at market peaks) often struggle. The best VCs generate returns across vintages through disciplined investing.
Example
Evaluating a VC's track record:
- Fund I (2012 vintage): 4.2x - Top quartile
- Fund II (2015 vintage): 2.8x - Top quartile
- Fund III (2018 vintage): 1.9x - Second quartile
- Fund IV (2021 vintage): 1.2x - Too early to judge
Consistent top-quartile across vintages indicates skill, not luck.
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