Fund Mechanics Advanced

Fund Vintage

The year a venture capital fund started investing, used to compare performance across time periods.

Definition

Fund vintage refers to the year a fund began making investments. It is used to compare fund performance across different time periods, since market conditions significantly affect returns. A 2019 vintage fund invested primarily during 2019-2023, while a 2021 vintage fund deployed capital at peak valuations. Comparing funds within the same vintage provides a fairer performance benchmark.

Why it matters

The vintage of the fund that invested in your company can affect investor behavior. A fund nearing the end of its investment period may be more patient, while a fund early in its life may push for quicker outcomes to establish a track record.

Example

A 2018 vintage fund invested in your company's seed round. By 2024, the fund is 6 years old and the GP is raising a new fund. Strong performance from your company helps the GP raise a larger Fund III.

Related terms

Venture Capital (VC)
Professional investment firms that fund high-growth startups in exchange for equity.
General Partner (GP)
The managing partner(s) of a VC fund who make investment decisions and manage the portfolio.
Limited Partner (LP)
An investor who provides capital to a VC fund but has no management role.
DPI (Distributions to Paid-In)
The ratio of cash returned to LPs relative to total capital they invested; the realized return.
TVPI (Total Value to Paid-In)
The ratio of total fund value (realized + unrealized) to capital invested; includes paper gains.
IRR (Internal Rate of Return)
The annualized rate of return on an investment, accounting for the timing of cash flows.

More from Fund Mechanics

This definition is an educational summary. It is not legal, tax, or investment advice. Specific terms in your equity grant or company documents may differ.