Venture Capital Vintage Years: Returns Through the Decades

You wouldn’t be alone if the term "vintage year" brought wine to mind. In venture capital, however, it refers to the year a fund begins investing, much like wine, these "vintages" help compare performances across the same time period, albeit with a bit less full-bodied flavour.

Drawing on data from Cambridge Associates, PitchBook, and Preqin, here’s a snapshot of venture returns through the decades:

Late 1990s: The Internet Boom & Bust
1996-1997: Some of the strongest returns on record, with top-quartile funds achieving net IRRs over 30–40%. Internet IPOs surged.
1999: The burst of the dot-com bubble, the average 1999 vintage net IRR hovered around zero, a testament to how quickly markets can turn.

Early-to-Mid 2000s: Recovery & Mixed Outcomes
2001-2003: Despite investor hesitation post dot-com crash, many funds quietly invested at lower valuations. According to Preqin, some of these vintages eventually settled into high single-digit or low double-digit IRRs.
2004-2007: Raised in a fairly robust economy, but faced challenges exiting during the 2008–2009 downturn. Returns varied, some hovered in the low teens, others slightly lower due to prolonged exits.

Post-2008: The Global Financial Crisis & Tech Renaissance
2009-2010: Cambridge Associates data suggests these funds often earned average net IRRs exceeding 15%. With tech valuations rebounding in the early 2010s, many portfolio companies exited at healthy multiples.
2011-2015: Benefited from a long bull market, strong IPO windows, and the rise of “unicorns.” Returns for these vintages have trended in the mid-teens, with top-quartile funds surpassing 20%.

Recent Vintages & Today
2016-2019: PitchBook notes that partial data shows mid-teen IRRs so far, but final numbers remain uncertain given late exits and the 2022–2023 tech valuation reset.
2020-2021: Marked the ZIRP (zero interest rate policy) era. Early signs point to these vintages being relative underperformers, with many funds writing down significant portions of their portfolios.
2022-Today: Most investors agree that as of late, the market has corrected to a more sustainable place. Value investing principles and a path to profitability are back. Will this result in strong fund performance? Time will tell.

Certain vintages, like the late ‘90s and post-2008, stand out, but every cycle has winners and losers. While markets ebb and flow, top-quartile funds still find ways to deliver strong returns. After all, not every "vintage year" needs a corkscrew, some vintages are for drinking, others for investing, and both taste best when they mature well.