1) For VC fund managers, if you invested in the Nasdaq 10 years ago, you’d be looking at a 4x return. Keep in mind, that’s investment performance that LPs can get with out paying "2 & 20".
2) Looking at one isolated data point is always a fallacy, but reality is that public stock market for technology companies has largely outperformed the vast majority of venture funds for the last decade.
3) This isn’t to say one is better than the others, but it's important to understand the differences between absolute and relative performance for investment returns
4) For LPs that invest solely in VC, a 4x fund is EPIC on both an absolute and relative basis, but few and far between. For LPs that have the ability to invest across asset classes, relative performance of VC as an asset class may be less attractive than others in 2020/2021.
5) Market uncertainty may yield desire for short-term liquidity and opportunistic investments (eg. distressed credit, deep value) that can generate IRRs in excess of VC. While were graded/paid on MOIC (and more appropriately DPI), for many LPs across asset classes, its about IRR.
6) All this is to say, when speaking with LPs, know whether you are playing an “absolute returns” game or a “relative returns” game. My guess is that LPs focused exclusively/heavily on venture are much more likely targets for 2020.
7) Would love thoughts of LPs who feel strongly in agreement or opposition
You can follow @Rick_Zullo.
Tip: mention @twtextapp on a Twitter thread with the keyword “unroll” to get a link to it.

Latest Threads Unrolled: