What return multiple can a venture fund credibly target?

Harry Stebbings · Jan 4, 2024

3x net is still a very good early-stage fund and people forget how hard that is to achieve

Scope: depends on fund size; early stage

63:25 20VC: Predictions for 2024: What Happens to Early Stage VC Funding, Do a Load of Venture Funds Die, What do LPs Do in 2024, Does Figma Kill the M&A Market, Will IPOs Comeback & What Does a Trump Administration do for Startups with Jason Lemkin @ SaaStr

Harry Stebbings · Mar 28, 2025

Three-times-net funds barely exist in the data and are extremely hard to produce

He has seen the fund return data

26:07 20VC: Why Traditional VC is Broken: How VCs Learned Nothing from 2021 | Why LPs are More Important than Founders & Advice to Emerging Managers | Bull Case for Bytedance & Why TikTok's Ban Doesn't Matter with Mitchell Green, Lead Edge Capital

Beezer Clarkson · Oct 18, 2023

A sub-$50M seed fund should be underwritten to a 5x

Scope: seed specifically

40:44 20VC: Are LPs Open For Business? What Does it Take to Raise a Fund Today? How Has What LPs Want to See in Fund Investments Changed? Why Do LP Incentive Mechanisms Need to Change? Which Funds Will be Hit Hardest with Beezer Clarkson @ Sapphire Partners

Max Altman · Nov 21, 2025

A credible fund target is 4-5x; a manager promising an 8x should be walked out on

His prior funds are at roughly 4x DPI with a path to five or six, which he considers knocking it out of the park — 10x is insane

44:05 20VC: Max Altman on The New Seed War: Can Anyone Compete with Sequoia and a16z | Leaving $2BN on the Table with Reddit | Lessons from Backing Rippling at $25M Post | Why Climate Tech is a Mirage and Disaster

Harry Stebbings · Oct 18, 2023

Managers routinely promise 10x funds without appreciating how extraordinarily hard a 10x is to achieve

40:46 20VC: Are LPs Open For Business? What Does it Take to Raise a Fund Today? How Has What LPs Want to See in Fund Investments Changed? Why Do LP Incentive Mechanisms Need to Change? Which Funds Will be Hit Hardest with Beezer Clarkson @ Sapphire Partners

Harry Stebbings · Nov 21, 2025

Young GPs who pitch big return multiples reveal their naivety and immaturity to LPs

Experienced people know how hard even a 5x is, so 7-8x projections signal inexperience

43:36 20VC: Max Altman on The New Seed War: Can Anyone Compete with Sequoia and a16z | Leaving $2BN on the Table with Reddit | Lessons from Backing Rippling at $25M Post | Why Climate Tech is a Mirage and Disaster

Jason Lemkin · Jan 4, 2024

There will be enough decacorns for some growth funds to return three x net, which will get LPs to re-up and rearm the decacorn hunters

A steady stream of Stripes, Databricks and OpenAIs is enough to justify taking the bets

39:45 Decacorn supply is sufficient for some growth funds to hit 3x net and attract re ups

Mitchell Green · Mar 28, 2025

The LP posture of only investing in 3x-net funds is a complete fallacy because such funds are almost nonexistent

If someone could reliably identify all the 3x net funds you'd hire them to run your money — nobody can point to where they are

26:42 Lp insistence on 3x net funds is a fallacy since they barely exist

Beezer Clarkson · Oct 18, 2023

There are far fewer 10x funds than people believed, because recent-vintage TVPI made returns look better than they were

TVPI looked bonkers over the last few years so people thought the picture was different; her experience in venture since 2000 and emerging markets project finance since 1994 tells her it is hard

40:53 Tvpi inflation created illusion of more 10x funds than actually exist