Traditional venture capital holds companies for roughly 17 years, which crushes returns even when cash multiples look good. VCs can't control when exits happen, so limited partners now judge funds on actual rate of return, not just total proceeds.
We're really playing the long game. We're trying to give you the biggest multiple of cash on cash. And that's okay. If you're going to fully liquidate and distribute the fund in 10 to 12 years, you can make that argument. But when you tack five more years onto that, it's reasonable to say, well, I let you hold my money for 17 years. The 17 years part is a big component. I could have done other things with that money, particularly in the out five years. And I think Venture is moving more to a business where I think we are going to be judged both on total amount of proceeds we return multiple, but also the implied rate of return on those. And I think that's a new mindset for Venture. And I think it's kind of for the reasons that Adam said, for the most part, as a vc, you don't have that much control over the timing of wins.
