Venture Capital Positively Disrupts Intergenerational Investing

Cambridge Associates

Research

10 Pages

Cambridge Associates analyzes US venture capital performance through its benchmark data, focusing on how returns, dispersion, and vintage year outcomes compare to public markets over time. The paper highlights how top-quartile funds dramatically outperform and suggests VC’s excess returns may be narrower than commonly believed once dispersion and timing are considered.

Key Takeaways

Extreme Return Dispersion: Top quartile VC funds achieved ~3.0x TVPI versus ~1.5x median, showing a ~2x spread between average and top-performing managers.
Public Market Comparison: Over a 25-year horizon, VC generated ~32% annualized returns versus ~11% for NASDAQ, but mPME narrows relative outperformance meaningfully.
Vintage Year Variability: Funds from 1999–2000 vintages underperformed with sub-1.0x multiples, while 2009–2013 vintages often exceeded 2.0x outcomes.
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