with Joe Schorge, Founder and Managing Partner at Isomer Capital
EUVC Academy · 53m · Fund Strategy, Fundraising, Fund Operations
VC benchmarking evaluates fund performance using metrics like IRR, TVPI, DPI, and PME. This is critical because LPs rely on these benchmarks to compare managers and guide allocation decisions across asset classes.
This session is grounded in the LP perspective, covering how benchmarks are built, interpreted and used in practice. It addresses dataset limitations, vintage year effects, and early-stage volatility, and shows how to position fund performance using tools like Cambridge Associates and PitchBook to support credible fundraising narratives.
Key Learning Points
Interpreting benchmarks in context
Benchmark outputs vary due to differing methodologies, data sources and collection approaches across providers
No dataset is fully representative, so benchmarks should not be treated as precise or complete measures of performance
Small sample sizes reduce the robustness of quartile benchmarking
Looking across multiple benchmarks provides a directional view rather than a precise measure
Understanding how LPs use benchmarking
Benchmarking informs both allocation decisions and manager selection within a given vintage and strategy
LP decisions sit within broader constraints such as liquidity needs, risk tolerance and long-term objectives
PME is primarily used to compare VC against public markets rather than to assess individual funds
Reading fund performance more accurately
Vintage year comparisons can be distorted early by differences in fund start timing
Early-stage fund performance is unstable, with funds moving across quartiles before outcomes settle
Venture returns are not meaningful in early years despite fundraising cycles requiring early evaluation
Positioning performance for fundraising
LPs evaluate manager performance across multiple funds to assess consistency over time
Net performance reflects what LPs receive, while gross performance shows the underlying portfolio before fees
For young funds, qualitative signals complement incomplete metrics when communicating performance
Supporting evidence includes follow-on activity, highlighted wins and case studies
