SaaStr · 2013-04-22
· 4790d
5 Non-Obvious Insights Into VC Decision-Making and Portfolio Strategy
Jason Lemkin reveals counterintuitive realities about venture capital investment patterns, including that individual VCs make only 1-2 deals annually, face capacity constraints, and prioritize mark-to-market gains for fundraising purposes. The article contrasts incentive alignment between small and large VCs, providing founders tactical guidance on choosing investment partners based on growth strategy.
Metrics in this report
Aggregate Effective VC Ownership Across Portfolio
32%
illustrative
Across 8 investments per VC per fund
Annual Deal Volume per VC Partner
1-2deals/year
average
Individual VC partner level
Effective Individual VC Ownership
4%
calculated
Per company (20% carry on 20% firm stake)
Small VC Target Ownership
15-20%
range
Small fund desired stake percentage
Small VC Typical Check Size
2-3$M
range
Small fund investment size
Target Firm Ownership per Portfolio Company
20%
target
VC firm standard ownership percentage
VC Limited Partner Count
15-20LPs
core
Most VCs' primary LP relationships