Transcript excerpt of a conversation (Jason M. Lemkin and another speaker) on venture-capital fund returns arguing that achieving a 3x net return is rare and valuable. The speakers criticize over‑optimistic fundraising claims (e.g., aiming for 8x or 10x) and stress that 3x net outperforms most asset classes and will be uncommon in current market multiples.
Every, every new VC that never had a fund was their, their, their deck was, I'm going to raise an 8x fund. I'm like, do you even know what that means? Right? There's a reason 3x net used to be rare until the boom. It's because that beats everything. 3x net beats every other asset class except exotic, except timber in good years or diamonds in odd years. 3x net beats everything. And 3x net is used to be rare. And it will be rare again. It will be rare in Today's multiples again, 3x net will be rare.
It's like it so pissed me off where people said, oh, I can see, you know, X can easily be a 5 to 10 billion dollar company, but can it be a 50 billion dollar company and you're like, 5 to 10 billion? That's a, that's a big company. That is a huge success. That was a throwaway.
Comment for something. And what if you own 2% of it and you have a $200 million, $100 million fund not going to build you a 10. Then you ask them, okay, how are you going to get a 10x fund out of that? Great. Hooray. Like how, how are you going to get a 10x fund? I don't think most these folks could even do the math.
I totally agree with you.
