Forget Returning The Fund. What Investment Can Return The Firm?

There’s an expression in venture capital called “returning the fund.” It simply means that an outcome in the fund (out of say 20–30 investments in that specific fund) makes enough money to return 100% of the principal. For example, in a $100 million fund, an investment which makes you back $100m “returns the fund.” $200m would be “2x the fund.” And so on. Of course the assumption in calling this a positive outcome is that you invest much less capital to achieve this return — putting $100m into a single company and getting that amount back wouldn’t be a good investment. That’s why you’ll hear something more like “yeah, we made 50x on that investment and it returned 2x the fund.”

You’ll find me @homebrew , Seed Stage Venture Fund w @satyap . Previously made products at YouTube, Google & SecondLife. Married to @cbarlerin .

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