VC Funds: A Median of 17 Months in Market to Final Close.

I get this question a lot: How long does it take to close a VC fund? We all know the anecdotes of marquee firms closing their funds within weeks. But don’t forget that it often took 20 years to become a marquee firm and to build a robust platform and track record. So they closed their fund after 20 years in the market, plus a few weeks :).

Our account exec Mark Cunha from Preqin dug out some performance data for venture funds globally for me. Not all funds report, and not all report well, and some don’t report or file timely. So we deleted some outliers (some that raised within a week, as well as funds that were in the market for several years before closing).

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Distinct count of Managers, globally, broken down by Vintage Year vs. Months to Final Close. 2018 did not have enough reported data. (Source: Preqin)

As you can see, each bucket is eerily evenly distributed. Let’s pull that apart and also show fund sizes:

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Global managers. Months in Market to Final Close for each Year of Vintage. Size shows Final Close Size (mn USD). The data is filtered on Months taken to Reach First Close, which keeps all values. (Source: Preqin)

The bars show the lower quartile border, median, upper quartile border. The green line is a trend line on averages, with horrible R-Squared of 0.008.  The bubble sizes show final close amounts in USD.  Here are some of the funds that had a final close under six months:

  • 2017: Ucar, Accel, Upfront, NFX, Mangrove, Town Hall, and others
  • 2016: Menlo, Cowin, Kibo, and others
  • 2015: Emergence, Institutional Venture Partners, Whitecap, Upfront, and others
  • 2014: Threshold, Tiger Global, Lerer Hippeau, Sofinnova, and others

As you can see, larger funds raise faster. At first, that is somewhat counterintuitive. But these are actual final close sizes: Only established firms and platforms have the relationships and the track record to close on that much capital. And as established firms and platforms, with a great track record, they an close quickly.

For non-marquee firms, fund-raising takes much longer: a median 16 to 18 months.  If you’re in the 3rd-quartile, you might be more in the 18 to 24 months range.

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