Vintage Year

Vintage year is the year a venture capital fund started deploying capital, typically the year of the fund's first investment or first capital call. The convention applies across PE funds, real estate funds, and other private investment vehicles, and is used by LPs and fund analysts to compare fund performance against peer funds from the same market environment and vintage cohort. It is a critical metric for evaluating fund manager skill versus market timing because funds raised in different years face dramatically different market conditions.

The structural logic: a 2020 vintage fund deploying $200M during 2020-2025 entered the market at very different valuations than a 2022 vintage fund deploying the same capital during 2022-2027. Comparing the two on absolute returns would unfairly disadvantage the 2020 vintage (which entered at peak prices); comparing them within their vintage cohorts gives a more accurate read of relative manager skill. The standard vintage-year benchmarks: Cambridge Associates, Burgiss, and Preqin publish vintage-year-specific quartile data for venture funds. Top-quartile funds in a given vintage typically return 2.5-4x+ net to LPs over 10-15 years; bottom-quartile funds often return less than 1x net. The variance between vintages is significant: top-quartile 2014 funds (riding the 2017-2021 valuation expansion through exits) outperformed top-quartile 2019 funds (deploying capital at 2020-2021 peaks then facing 2022-2024 markdowns). The 2020-2021 vintage challenge: many funds raised in 2020-2021 deployed at peak valuations and faced significant markdowns in 2022-2024. Even strong managers in those vintages have underperformed their absolute targets, though they may still be top-quartile within their vintage. The 2022-2024 vintage opportunity: funds raised in 2022-2024 deployed at lower entry prices, which positions them favorably for subsequent returns if exits materialize. The "vintage timing" effect is one of the most important variables in venture fund returns and explains much of the difference between funds.

What founders get wrong: Not knowing the vintage year of the fund they're raising from. The vintage year determines where the fund is in its lifecycle (early/mid/harvest), what its remaining dry powder looks like, and what valuation expectations they're calibrated to. Ask explicitly when in conversation with a fund; the information is usually freely shared.

Related: Venture Capital Fund · Limited Partner · Venture Capital

FAQ

What is vintage year?
The year a venture capital fund (or PE fund, real estate fund) started deploying capital, typically the year of the fund's first investment or first capital call. Used by LPs and fund analysts to compare fund performance against peer funds from the same market environment and vintage cohort.

Why does vintage year matter?
Because funds raised in different years face dramatically different market conditions. A 2020 vintage deploying at peak valuations through 2025 faces different return dynamics than a 2022 vintage deploying at lower entry prices through 2027. Comparing funds within vintage cohorts gives more accurate manager-skill assessment than absolute returns.

Where do vintage-year benchmarks come from?
Cambridge Associates, Burgiss, and Preqin publish vintage-year-specific quartile data for venture funds. Top-quartile funds typically return 2.5-4x+ net to LPs over 10-15 years; bottom-quartile funds often return less than 1x net. The variance between vintages is significant due to market timing.