Has VC Persistence Persisted?

If a VC fund is successful, how often is the next fund also successful?

 
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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:

  1. Successful VC funds tend to have persistent success fund-over-fund.

  2. So, if a prior VC fund is top quartile, the next fund is also top quartile almost 50% of the time.

  3. VC firms moving from bottom quartile to top quartile (and vice versa) happens only 13% of the time.

  4. However, there is little to no evidence that persistence is true for buyout firms.


 
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