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@km
, 7 tweets, 1 min read Read on Twitter
VC industry-wide performance is so interesting, especially when you benchmark it against other indexes. Look at this chart from Cambridge Associates 2018.
A pessimistic view: I can’t believe venture capital is only as good as the stock market. So much more risk for the same return?
An optimistic view: an investment strategy designed to fund companies with no revenues, tiny teams, and no fundamentals performs as well, in aggregate, as the S&P 500. Venture works!
(“In aggregate” does all the work in that optimistic view there, yes.)

But what happens with very old (20 year+) vintages? Venture suddenly looks amazing. What gives?
This last piece seemed strange to me. So I kept looking up vintages.

Went back 10+ years. Each time the chart looked the same. Venture is like everyone else until 15-20 years out. Then, especially early stage venture, 🚀.
So can someone smart explain this?

I’ll hazard a simple guess: future yield is the spoils of today’s innovation. But it takes a long, long time.
(Correction, that is Cambridge 2017. Point — and question — remains!)
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