Be very careful. The IRR for a fund that is very young is deceiving. Fund V, for example, closed at the end of 2016. AT the time the documentation was put together, there could have been very little capital deployed and it doesn't represent subsequent rounds that have yet to be raised.
Andreessen Horowitz Returns Slip, According to Internal Data
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Re: Andreessen Horowitz Returns Slip, According to Internal Data
#22Be very careful. The IRR for a fund that is very young is deceiving. Fund V, for example, closed at the end of 2016. AT the time the documentation was put together, there could have been very little capital deployed and it doesn't represent subsequent rounds that have yet to be raised.
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Re: Andreessen Horowitz Returns Slip, According to Internal Data
#23What are returns of VC firms generally? Anyone has done analysis on this?
It is nearly impossible to do so given the private nature of these numbers but having worked in the industry extensively I can tell you the returns are generally atrocious and that no one invests in VCs to be fiscally responsible in the traditional sense. Investors who put money in VC are generally so wealthy that by the time they are ready to invest in VC they have exhausted all other standard investment opportuniti…
Translation: Its set aside money for the purpose of gambling. If they roll a 7 then thats all the better, but its not critical cash flow.
Re: Andreessen Horowitz Returns Slip, According to Internal Data
#24What are returns of VC firms generally? Anyone has done analysis on this?
It is nearly impossible to do so given the private nature of these numbers but having worked in the industry extensively I can tell you the returns are generally atrocious and that no one invests in VCs to be fiscally responsible in the traditional sense. Investors who put money in VC are generally so wealthy that by the time they are ready to invest in VC they have exhausted all other standard investment opportuniti…
Two Thoughts:
1. Consistent High Performers vs Everyone Else: As with colleges, grad schools, starting salaries, hedge funds, and a host of other things -- it would be good to have a top-20 "typical" return and an aggregate "typical" return.
2. Returns are only one aspect, returns correlation is another. Even post-fee returns at s&p500 rates would be awesome if they are uncorrelated to the rest of the portfolio.
Re: Andreessen Horowitz Returns Slip, According to Internal Data
#25What are returns of VC firms generally? Anyone has done analysis on this?
It is nearly impossible to do so given the private nature of these numbers but having worked in the industry extensively I can tell you the returns are generally atrocious and that no one invests in VCs to be fiscally responsible in the traditional sense. Investors who put money in VC are generally so wealthy that by the time they are ready to invest in VC they have exhausted all other standard investment opportuniti…
Could you elaborate on what it means to have "exhausted all other standard investment opportunities like stocks, private investments in mature companies, personal trusts and real estate"? Is this due to some tax/estate laws?
Re: Andreessen Horowitz Returns Slip, According to Internal Data
#26Would be interesting to know how much of an impact their bullish stance on cryptocurrencies and related projects had in this.
Re: Andreessen Horowitz Returns Slip, According to Internal Data
#27What are returns of VC firms generally? Anyone has done analysis on this?
This is the best analysis I have ever seen on this subject. Kauffman is probably the only major investor that has enough exposure to do this (none of the Vcs they’re invested in are going to cut them).
Re: Andreessen Horowitz Returns Slip, According to Internal Data
#28What are returns of VC firms generally? Anyone has done analysis on this?
It is nearly impossible to do so given the private nature of these numbers but having worked in the industry extensively I can tell you the returns are generally atrocious and that no one invests in VCs to be fiscally responsible in the traditional sense. Investors who put money in VC are generally so wealthy that by the time they are ready to invest in VC they have exhausted all other standard investment opportuniti…
Are you for real? This makes vc bros seem like the greatest con there is then. I'm sure the people running these vc's are making decent money from collecting fees on these random bets
Re: Andreessen Horowitz Returns Slip, According to Internal Data
#29Key points: The funds the firm raised in 2010 and 2011 showed a net internal rate of return of 16% and 12%. The results are a significant drop from the 44% return rate of its 2009 fund.
Did people think a 44% return was sustainable?
I would imagine that 44% return went a long way towards the vaunted status A16z had. In that, while perhaps not expecting to stay at such a high level of return, it's news because it wouldn't have been expected that such a drop (to the point where investing in common stock market index funds would have yielded a similar or better return) would have happened.
Re: Andreessen Horowitz Returns Slip, According to Internal Data
#30Key points: The funds the firm raised in 2010 and 2011 showed a net internal rate of return of 16% and 12%. The results are a significant drop from the 44% return rate of its 2009 fund.
Did people think a 44% return was sustainable?
And isn't 16% ans 12% still excellent? It seems better than almost anything else really...