Assertion Supported
Clark: 45 Venture Investments Have Returned $1B+ to a Single Fund
“So we had a look at our data and we found 45 investments that have returned a billion dollars to the single fund that invested and were also fund returners.”
Assertion Supported
PitchBook data: Only 2.6% of VC funds reach 5x DPI
“More than 50% hadn't returned one X capital. And so these are funds that are more than, that are 10 years old now, at least 10 years old now, hadn't returned one X capital. There was just 6.6% that had generated three X net DPI. And just 2.6% that had generate…”
Prediction Open · timeframe Mar 2034
Clark: Tech venture exit sizes will increase over next 10-15 years
“Ultimately the markets that they're playing in, and the share of the economic pie that technology is going to capture, in our view, is only going to increase. And so that gives us confidence that whatever the multiples are at the time of exit, the directionall…”
Prediction Open · timeframe Mar 2029
Clark: M&A regulatory chill will concentrate VC returns in fewer companies
“I think the impact that will have is that the concentration of returns in venture is going to be even smaller as they're going to be fewer companies that ultimately account for that, that performance.”
Disclosure
Clark: VenCap last added a net-new fund manager in 2018
“Our last one was probably 2018. And it was a fund 18.”
Insight
Clark: LPs prioritize capital deployment over 15-year fund performance
“Most LPs probably aren't going to be in the same job when that feedback comes. So they're more worried about deploying than they are about what happens 15 years down the line when, you know, when the performance data is, is actually in.”
Assertion Supported
Clark: A Venture Manager's First Hit Is Random, But Repeatable
“So, again, going back to some of the academic data that's out there, it does suggest that that first success is actually random, but once you've had that first success, There's a high likely or higher likelihood that you can then leverage it and start that vir…”
Opinion
Clark: The Sequoia Fund structure was right despite bad market timing
“And I think it's interesting that the criticism that Sakaya had for the Sakaya Fund It's absolutely the right idea. It just happened that they implemented it at a time in the market where you saw a significant correction once it was put in place.”
Disclosure
David Clark has never seen a 3% fee and 30% carry VC fund
“Two and a half. I'd have to double check that, but I'm pretty sure there's nothing that I've seen that's a three and 30.”
Assertion Supported
VenCap's early, growth, and non-US funds yield nearly identical aggregate TVPI
“We looked at what's the performance of the early stage US funds from our core managers from 2005 onwards. What's the performance of the growth funds from our core managers from 2005 onwards? What's the performance of the non-US funds from 2005 onwards from our…”
Assertion Not checkable as stated
Clark: Newer VC managers maintain last-round marks while established managers write down
“From newer managers, one of the things we look at are where are they holding their marks, and generally we've seen the new managers holding last round value marks, and not writing anything down, where it's the more established managers that are perhaps earlier…”
Prediction Open · timeframe Mar 2029
Clark: Early-stage loss ratios will return to 60%, causing widespread startup failures
“My sense is that it's going to go back to the average. It's going to go back to that sort of 60%. So I think there's a lot of pain still to be had. So that's not just companies who are going to get see their values reduced. I think there's a lot that ultimatel…”
Prediction Open · timeframe Mar 2029
David Clark: Late-Stage VC Returns Will Decline as Valuations Become Efficient
“If you're talking about, you know, the people that are raising multiple billions of dollars to do you know, to do the crossover deals, the late stage private rounds, Then I think that is more of a capital allocation exercise than it is a kind of craft business…”
Assertion Not publicly verifiable
Clark: 30 companies yearly drive over half of global VC exit value
“Venture is a power law industry, and it's one percent of the exits that ultimately generate the bulk of the returns created by the entire industry globally. So we're looking at around 30 companies a year that generate more than half of the total exit value for…”
Disclosure
VenCap core fund managers deliver ~3.5x aggregate net multiple
“So we have a group of a dozen core managers and, you know, like, 90% of all the capital we've invested over the last decade plus has gone to those managers. And when we look at the performance of their mature funds, so let's take away the ones that were raised…”
Disclosure
Under 3% of VenCap venture fund investments lose capital over 30 years
“What we found is less than three percent of those funds haven't, are showing a TVPI of less than one X. And this is going back Some of those funds are going back 30 years. So that's through the dot-com boom and bust. It's through the financial crisis.”
Disclosure
David Clark: VenCap managers backed 85% of top VC exits over 6-7 years
“And so when I look back at the best VC exits over the last six or seven years, The managers that we've backed have been in 85% of the top 20 or 30 exits there.”
Disclosure
Clark: VenCap typically enters VC manager relationships at Fund III
“The earliest we would intercept a manager would probably be fund three. And that's where we've had the most success historically. So if I look at our 12 managers, probably half of them we ended up doing it from three.”
Disclosure
Clark: VenCap Has Never Invested in a Manager Who Pitched Them Directly
“We have, I want to say we've never invested in a manager that has come into us directly.”
Insight
Clark: Poor Succession Planning Is a Leading Cause of VC Firm Failure
“One of the reasons why we see great firms fail is because they don't handle succession well, and some of them will handle succession badly, but get there eventually.”
Prediction Not checkable as stated
Clark: LPs will wait 18-24 months for liquidity after IPOs resume
“So even if we start to see IPOs in the second half of this year, it's going to be six months before those shares become freely tradable and again, it will probably be another 12 to 18 months before those positions ultimately get fully distributed.”
Disclosure
David Clark: VenCap Backs Venture Firm With Mandatory Age-Based Retirement
“So there's one of the managers that we back that have a, that has a policy that says once you get to a certain age, you're out unless you're invited by the rest of the partners to stay Within the partnership.”
Insight
Clark: VenCap declines existing VC managers only for performance and succession
“I think that the two reasons we don't do, the two reasons we would say no to an existing manager would be performance and succession.”
Disclosure
VenCap's top-performing fund of the past 15 years is a growth fund
“Our best performing core manager fund in the last 15 years as a growth fund.”
