      SaaStr · 2015-09-14
      · 3915d
    

Why Early-Stage VC Funds Face LP Fundraising Challenges: The 500 Startups Case Study

Jason Lemkin analyzes why Dave McClure's 500 Startups faced difficulty raising capital despite strong performance, attributing it to LP requirements for cash-on-cash returns, conservative investment patterns favoring established names, and the paradox of early-stage investing timelines. He argues that as 500's portfolio matures, fundraising will accelerate significantly.

3 metrics· Cited 0× in the knowledge base ·Open source ↗

Metrics in this report

Cash-on-Cash Return Multiple

1xmultiple

minimum

LP requirement for VC fund investment

Fund Return Rate Below 1x

majorityproportion

descriptive

Most VC funds fail to achieve positive returns

Internal Rate of Return (IRR)

20%+%

median

500 Startups across all funds vs. industry standard