How much does the timing of a fund's vintage determine venture returns?

Martín Escobari · Nov 11, 2022

Firms should never deploy fund commitments faster than three years and should ensure the vast majority of portfolio companies have fully funded plans

The two ways you get hurt, learned in 2000, are spending too much LP money at the peak and holding unfunded business plans that must raise when markets freeze, leading to dilution or death

17:21 20VC: Why Market Size is Everything | Three Signs of a Bull Market and How To Remain Disciplined | Why Investing is a Young Person's Game | The Secret to Negotiation | Missing a $200M Opportunity in Nubank and more with Martín Escobari, Co-President @ Ge

Shu Nyatta · Jul 31, 2023 · hedged

Funds must resist the urge to overdeploy early and should pace deployment over roughly three years

At the beginning every company looks exciting, which creates pressure to overdeploy

Scope: 'I would imagine' about the three-year figure

35:49 20VC: Marcelo Claure & Shu Nyatta on Lessons from Investing $7.5BN at Softbank & Why Dumb Money has Gone, Why "LATAM is Under Construction" and the Next 10 Years Will Be the Best & Investing Lessons from Missing Nubank & OpenAI & Investing in FTX

Cem Sertoglu · Nov 20, 2024

A venture fund's job is to expose each vintage to the strongest opportunities rather than to time the market, so you keep investing even in frothy periods

Ten-year fund lives define the business structure; in bull markets entry prices are up but exit prices are up too, so they balance each other

8:11 20VC: Turning $16.5M into $2.1BN; Lessons from the Greatest Venture Investment in European History: UiPath | Why VC is Not Being Commoditised | Why Price Does Not Matter | Lessons on Loss Ratio, Selling and Signalling with Cem Sertoglu

Philipp Freise · Jun 30, 2025

The discipline of linear deployment across the fund cycle — roughly three years in venture and four to five in private equity — is essential to avoid vintage concentration risk

Linear pacing forces you to deploy roughly a quarter of the fund even in a year like 2020 when most people deployed nothing, and it protects against over-deploying into a single market environment

Scope: KKR went 10-15% above its linear pace in 2020

12:17 20VC: Inside KKR's Monster $8BN European Fund | The $500M Turkey Gamble That Went Wrong | Do Andreessen & General Catalyst Scare KKR? | Will AI Kill the PE Model? | Can The PE Model Survive without IPOs and Where is the Liquidity with Philip Freise

Harry Stebbings · Aug 25, 2025

Temporal diversification of entry pricing is critically important for a fund

His own first fund has good companies bought at high prices in the first half and much more reasonable prices in the second half

63:34 20VC: Do Margins Matter in AI? | Is Defensibility Gone For Good? | Is Vertical SaaS Dead in a World of AI | What SaaS Rules Are BS and No Longer Apply in a World of AI | The Future of Venture: Why Chanel vs Walmart is BS with Byron Deeter

Byron Deeter · Aug 25, 2025

Smooth, consistent deployment pacing is the most successful model for time diversification in venture, even though the theoretically correct strategy would be to be most aggressive when markets are cool and pull back when they're hot

Very few investors are actually good enough to play markets counter to trends, so consistency is what lets you weather storms and be positioned for clustered exit windows

Scope: counter-cyclical investing is probably optimal but rarely executable

63:44 20VC: Do Margins Matter in AI? | Is Defensibility Gone For Good? | Is Vertical SaaS Dead in a World of AI | What SaaS Rules Are BS and No Longer Apply in a World of AI | The Future of Venture: Why Chanel vs Walmart is BS with Byron Deeter

Harry Stebbings · Jan 30, 2023

Vintage diversification is the biggest driver of venture returns, and its benefits will only now become visible because the last decade's vintages were uniformly inflated

Portfolios now blend 2021 pricing with 2023-24 pricing, whereas over the past ten years every vintage was priced ridiculously so diversification made no difference

31:33 20VC: Homebrew's Hunter Walk and Satya Patel on Why $100M is Not Enough To Execute a Seed Strategy Today | Why They Decided not to Raise New External Funds | Where Are We in the Cycle & What is Truly F***** | Why Founders Should Take Secondaries Earlier

Harry Stebbings · Jan 22, 2024

Venture returns are concentrated in tiny finite windows of time, and if you don't invest inside those windows it's very hard to make money in venture at all

The historical arc of venture return distributions shows the majority of returns sit in a few short periods

59:06 20VC: Why Small Markets are Better Than Big Markets, The Biggest Delusion of Early Stage VC, Why AI Investing is like a Horserace and Why The Most Ambitious Companies Growing the Fastest are not the Best Investments with Adam Fisher, Partner @ Bessemer

Larry Aschebrook · Jun 16, 2025

What Alibaba, Spotify, Palantir and Twitter had in common was the period: no liquidity options, large private valuations, and genuinely differentiated, unchallenged business models

The liquidity window was still early coming out of the financial crisis — there were very few IPOs between 2010 and 2014

16:49 20VC: How We Made $800M on Coursera | We Lost Money on Uber and Made Money on Lyft | We Did 3x on Postmates in 18 Months | DPI is King, MOIC is BS | We Dodged Theranos and I Still Lost Millions with Larry Aschebrook @ G Squared

Larry Aschebrook · Jun 16, 2025 · hedged

Which companies become big winners is largely a product of the time period you're operating in — e.g., Impossible Foods and Beyond Meat in that era, driven by herd mentality

Investment outcomes are a product of the period you are operating in, and in that period plant-based food was 'a big deal' and everyone piled in

Scope: about the plant-based food cycle

38:01 20VC: How We Made $800M on Coursera | We Lost Money on Uber and Made Money on Lyft | We Did 3x on Postmates in 18 Months | DPI is King, MOIC is BS | We Dodged Theranos and I Still Lost Millions with Larry Aschebrook @ G Squared

Oren Zeev · Feb 2, 2026

In 2021 essentially every deal was done at three to four times the price it should have been, which turns what would have been a 5x fund into roughly 1.5x

That was the market and there was no other way to invest; even great winners can't offset paying 3-4x across every position

Scope: the companies themselves were good quality; the affected fund will still not lose money

28:16 20VC: 50% of Funds Will Go Out of Business | Why Growth Expectations Today are BS and Will Not Last | Why Oren Zeev Takes $0 Management Fees But 30% Carry | Why GPs Should Not Tell LPs Their Strategy

Jerry Murdock · Feb 28, 2026

Timing of vintage is the single strongest correlate of venture fund success, more than overall strategy or stage

A 2005-06 fund could catch the mobile wave that became real in 2008 and get into the iconic companies; a 2009 fund missed being early in Twitter, Facebook and Uber

Scope: applies to both early and late stage; depends on timing of the individual investment, not just the fund

45:04 20VC: Why Cursor is Dead | An AI Tsunami is Coming & You Need to Prepare | Systems of Record Become Valueless Databases with Agents | Is This The End of Tech Private Equity with Jerry Murdock, Co-Founder of Insight Partners

Ed Sim · Jan 10, 2024

Now is the time to deploy capital — this will be an outstanding venture vintage

Building enterprise software is extremely hard and slow, so patient capital deployed now should do well

0:05 20VC: Did Figma Kill M&A Markets in 2024, The Three Biggest Mistakes Made in Growth Investing, The Three Requirements Companies Need to Go Public in 2024 with Ed Sim and Jamin Ball

Ed Sim · Jan 10, 2024

Now is the time to put money to work, and 2024 will be an incredible vintage judged five years out

Valuations have adjusted and founders have found religion about how to build companies

Scope: counterintuitive because some LPs don't want capital calls; he's speaking about early stages where he invests

61:24 20VC: Did Figma Kill M&A Markets in 2024, The Three Biggest Mistakes Made in Growth Investing, The Three Requirements Companies Need to Go Public in 2024 with Ed Sim and Jamin Ball

Jamin Ball · Jan 10, 2024 · hedged

We are in the bottom half or bottom third of the valuation reset and the first third of a massive technology shift, making this year's and next year's vintage potentially special

The ideal moment to invest is the bottom half of a valuation reset overlapping the first half of a technology shift, and that shift will create enormous creative destruction

Scope: calling the exact bottom is impossible

61:57 20VC: Did Figma Kill M&A Markets in 2024, The Three Biggest Mistakes Made in Growth Investing, The Three Requirements Companies Need to Go Public in 2024 with Ed Sim and Jamin Ball

Kevin Hartz · Jul 22, 2024

Venture returns going forward will be much better than the 2021-2022 vintages

2021-22 was a catastrophe, so it is a very low bar to index against

Scope: comparison is relative to a very poor baseline

58:35 20VC: How I Lost Airbnb at Seed Because of an Exploding Term Sheet | Investing Lessons from Roelof Botha & Peter Thiel | Why VC is Less Collaborative Than Ever and Great Companies Are Being Destroyed by Too Much Cash with Kevin Hartz @ A*

Jamin Ball · Jan 10, 2024

The wrong response to a bad vintage is to blame the vintage and move on to the next fund; investors owe it to LPs to fight to make every fund a positive vehicle

Doug Leone described clawing a 0.3-0.4x fund up to 1.9x rather than writing it off

28:16 20VC: Did Figma Kill M&A Markets in 2024, The Three Biggest Mistakes Made in Growth Investing, The Three Requirements Companies Need to Go Public in 2024 with Ed Sim and Jamin Ball

Cem Sertoglu · Nov 20, 2024

Managers should not get an automatic pass for a bad 2021 vintage; LPs should ask whether they did what they said they would do and whether underperformance is genuinely attributable to markets rather than other factors

If the performance issue is purely vintage related that is defensible, since funds are benchmarked by vintage; but that has to be established rather than assumed

Scope: depends on how you played it

53:24 20VC: Turning $16.5M into $2.1BN; Lessons from the Greatest Venture Investment in European History: UiPath | Why VC is Not Being Commoditised | Why Price Does Not Matter | Lessons on Loss Ratio, Selling and Signalling with Cem Sertoglu

Harry Stebbings · Oct 25, 2024

Many 2021 vintage venture funds will not return 1x

36:56 20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry

Cem Sertoglu · Nov 20, 2024 · hedged

The majority of funds raised in 2021 will not return 1x

Scope: stated as a suspicion of what is probably the case

54:36 20VC: Turning $16.5M into $2.1BN; Lessons from the Greatest Venture Investment in European History: UiPath | Why VC is Not Being Commoditised | Why Price Does Not Matter | Lessons on Loss Ratio, Selling and Signalling with Cem Sertoglu

Mamoon Hamid · Oct 21, 2024

Fast deployment can work well — the fund they deployed in ~15 months will be an amazing fund — even though the counterpoint is that time diversification would have avoided the high-valuation environment

They were a new team with no board seats, drive, and a fund ready to deploy, and they concentrated on real-ownership Series A rounds

45:53 Fast deployment can produce a great fund despite vintage concentration risk

Jerry Murdock · Feb 28, 2026

Now is the best time ever to start a new venture fund

A sea change is underway in which autonomous agents rather than humans make software decisions, and firms built from scratch around the new model have a large advantage over already-rich incumbents who can't move fast enough

46:08 The agent era vintage favors brand new firms

Mark Goldberg · Oct 25, 2024 · hedged

2021 vintage funds will be very challenged and won't do well, but will likely still beat 1x

37:03 2021 vintage funds challenged but will likely still clear 1x

David Frankel · Oct 14, 2024

2018-and-later vintage funds are structurally short of DPI, unlike earlier vintages that were already distributing capital at the five-to-six-year mark

A perfect storm of ZIRP, COVID-era day trading and escalating multistage rounds (10 on 40, 20 on 80) pushed valuations up so far that no exits have cleared; earlier funds returned capital through mid-sized companies well before the Ubers and Coupangs

25:21 2018 plus vintages are structurally short of dpi due to zirp driven valuation inflation and no exits