Has VC Persistence Persisted?
If a VC fund is successful, how often is the next fund also successful?
By Collin West
There are a few researchers and professors that are really top of their game in VC. And Steven N. Kaplan from Chicago Booth churns out some of the most high-quality VC analysis out there.
In a recent paper, Steven N Kaplan, Robert Harris, Tim Jenkinson, and Ruediger Stucke wrote about manager persistence in private equity - looking at both Buyout and VC funds.
The results are very encouraging for those that have built successful VC funds in the past.
They found:
Successful VC funds tend to have persistent success fund-over-fund.
So, if a prior VC fund is top quartile, the next fund is also top quartile almost 50% of the time.
VC firms moving from bottom quartile to top quartile (and vice versa) happens only 13% of the time.
However, there is little to no evidence that persistence is true for buyout firms.