The Vintage Year Power Law

Stepstone

Research

6 Pages

StepStone highlights that a small subset of VC vintage years—typically 5–7 out of every ~23—account for around 80% of total venture capital returns across multiple time horizons. The study underscores that identifying and committing to these rarer “power‑law” vintages is a far more important driver of returns than manager selection or short‑term timing.

Key Takeaways

Vintage-driven returns: Around 80% of VC returns historically stem from just 5–7 vintage years, with 95% coming from 6–10 vintages.
Don’t chase recent winners: Recency bias and FOMO lead LPs to overcommit after big vintages (e.g., 2021), reducing effectiveness when conditions normalize.
2024 as a key setup: With fundraising cooling and dry powder declining, current conditions resemble prior power-law years—making 2024 potentially significant.
Figure 2 below shows that 80% of venture capital returns have been driven by 22-30% of vintages over each of the measured periods. Said otherwise, of the 23 vintage years assessed, 80% of returns come from just 5-7 separate vintage years over the short, medium & long-term.
VIEW FULL REPORT

Join our newsletter to have all of this content + Exclusive Newsletter Bonus Content delivered to your inbox every week

Related Content

Alternative Assets
Unicorn Lists Are Prediction Markets. This List Is a Scorecard.
Aug 2026
Fixed-Income
MidYear Credit Outlook: Adoption, Financing, and Investing in the Age of AI
Aug 2026
Alternative Assets
2026 private equity midyear update: Private longer, public later
Aug 2026

The information contained in this communication is of a general nature for informational purposes only, and does not constitute financial, investment, tax or legal advice. The information contained within this communication reflects the opinions of those referenced herein, and do not reflect the opinions of The Idea Farm, L.P. and its affiliates. Such opinions expressed herein are as of the date of production and are subject to change at any time without notice due to various factors, including changing market conditions or tax laws. Where data or information prepared by third parties is presented, no representation, warranty, or undertaking, expressed or implied, is given to the accuracy or completeness of such information by The Idea Farm, L.P. or any other person. While such sources are believed to be reliable, The Idea Farm, L.P. does not assume any responsibility for the accuracy or completeness of such information and does not undertake any obligation to update the information contained herein as of any future date. Any links to third party websites are offered only for use at your own discretion. The Idea Farm L.P., and its affiliates, are separate and unaffiliated from any third parties listed herein and are not responsible for their products, services, policies or the content of their website. All investments are subject to varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy or product referenced directly or indirectly in this communication will be profitable, perform equally to any corresponding indicated historical performance level(s), or be suitable for your portfolio. Past performance is not an indicator of future results.

Scroll to Top