VC Returns Revealed: Fund Performance for Sequoia, IA Ventures, USV & More (2024)

FAQs

What is the performance of the Sequoia Capital fund? ›

Fund Performance

The fund has returned 13.45 percent over the past year, 3.61 percent over the past three years, 7.54 percent over the past five years and 5.74 percent over the past decade.

Top VCs are typically looking to return 3-5X+ on their entire fund to their LP investors over ~10 years. For this, they need multiple 'fund mover' outcomes in each fund, since many early-stage investments will eventually fail or return only a small % of the fund.

They expect a return of between 25% and 35% per year over the lifetime of the investment. Because these investments represent such a tiny part of the institutional investors' portfolios, venture capitalists have a lot of latitude.

Overall Rating. Morningstar has awarded this fund 2 stars based on its risk-adjusted performance compared to the 1109 funds within its Morningstar Category.

Sequoia Capital has come out on top of Dealroom's latest global ranking of VC investors, based on the success of the firms they back, as well as how early the firms were to back these fast-growing technology and software businesses with global potential.

Sequoia Capital is an American venture capital firm headquartered in Menlo Park, California which specializes in seed stage, early stage, and growth stage investments in private companies across technology sectors. As of 2022, the firm had approximately US$85 billion in assets under management.

Sequoia Capital is widely considered to be one of the top venture capital (#vc ) firms in the world. Founded in 1972, the firm has a long history of investing in and helping to grow successful technology companies.

Sequoia Capital

Over time, they have made around 1,275 investments, 265 of which were successful exits for a ratio of 20.71 percent. As a lead investor, more than 63 percent of the companies that they invested in made it to IPO. Some notable exits include NVIDIA and Instagram.

It may ebb and flow, but it will always be there as a strong demand. There will always be money to be raised. And yet, despite all that cash flowing into VC-backed companies, twenty-five to thirty percent of them will fail.

What is a good IRR for VC fund? ›

Financial professionals use IRR to set “hurdle rates." A hurdle rate is a minimum IRR value a given investment has to meet for investors to deem it successful. In venture capital, LPs typically expect a fund's net IRR to reach at least 20% by the time a fund has exited all of its investments.

A good return on investment is generally considered to be around 7% per year, based on the average historic return of the S&P 500 index, adjusted for inflation. The average return of the U.S. stock market is around 10% per year, adjusted for inflation, dating back to the late 1920s.

Venture capitalists make money from the carried interest of their investments, as well as management fees. Most VC firms collect about 20% of the profits from the private equity fund, while the rest goes to their limited partners. General partners may also collect an additional 2% fee.

Venture capital is a high-risk, high-reward type of investment, and there is no guarantee of success. While VC firms aim to identify the best opportunities and minimize risk, investing in startups and early-stage companies is inherently risky, and there is always the potential for loss of capital.

The topline: The optimal venture fund size is $200 million to $350 million, according to Santé's new analysis. These funds are able to generate higher returns via typical exits.

Sequoia to split off China, India/Southeast Asia businesses amid geopolitical tension. U.S. venture capital giant Sequoia plans to split off its Chinese and Indian/Southeast Asian businesses into two independent firms, it said on Tuesday, as it tries to better navigate economic and geopolitical challenges.

The average investment total is calculated as follows: $2,130,000,000/19 = $112,105,263.16. As of December 2020, Sequoia has a 20.71% success rate based on investment to exit ratio, with 1,275 investments of which 365 were successful exits.

In 1977 Sequoia invested $150k in a fruit company a little PC-maker called Apple. The position was closed in 1979, before Apple's IPO, for roughly $6m — a healthy return, but shockingly low relative to what the firm would've made in the coming years.