Every new VC fund pitches the same story: “We’re going to return 5x.” A 5x fund. Almost every new manager throws this out like it’s simple. It’s obvious.
Every LP hears it. Most nod politely. Few believe it.
And the data shows why they shouldn’t.
David Clark at VenCap International (a limited partner in so many of the top VC funds) just analyzed over 1,900 VC funds raised between 2000-2019 using Pitchbook data, and the results are brutal for anyone who thinks generating top-quartile returns is just about “working hard” and “adding value.”
Here’s what the data actually shows about the entire VC industry:
64% of VC Funds Don’t Even Double Investors Money After 10+ Years
The overall numbers are tough across VC funds:
- 22% of VC funds lose money. Not “underperform” — they literally return less than 1x. One in five funds handed back to LPs less than they put in.
- 64% of funds never hit 2x. Nearly two-thirds of all VC funds fail to even double capital. That’s the base case, not the exception.
- Only 6% of funds return 5x or more. That target every GP pitches? It happens in 1 out of every 17 funds.
- Just 2% hit 10x. The mega-outcome funds are a rounding error in the data.
Let me put this in perspective: A randomly selected VC fund is 3.7x more likely to lose money than return 5x.
That’s not a minor difference. That’s not noise in the data. That’s the fundamental reality of the asset class.
But What’s Key Is The Top Funds Do Better — Repeatedly. There’s a Second Data Set That Changes Everything
VenCap didn’t just analyze the industry. VenCap is a Tier 1 “limited partner” with access to make of the top VC funds.
They analyzed their own portfolio of 101 “Core Manager” funds — the leading VC firms they’ve backed over the same 2000-2019 period.
The performance distribution is completely different:
Loss-making funds (<1x):
- Industry: 22%
- Core Managers: 2%
You go from one in five funds losing capital to almost none. The odds of permanent capital loss drop by 91%.
Strong returns (>2x):
- Industry: 36%
- Core Managers: 68%
The likelihood of at least doubling your money nearly doubles itself.
High-performing funds (>3x):
- Industry: 18%
- Core Managers: 45%
You’re 2.5x more likely to hit a genuinely strong outcome.
Outlier funds (>5x):
- Industry: 6%
- Core Managers: 18%
This is the critical insight: backing the right managers makes a 5x fund three times more common. Not marginally better. Three times.
Mega-outliers (>10x):
- Industry: 2%
- Core Managers: 5%
Even 10x funds go from being a rounding error to something that happens with modest regularity.
What This Actually Means for Venture
Same time period. Same asset class. Same macro cycles. Completely different outcomes.
The difference isn’t luck. It’s not timing. It’s not even market selection.
It’s that a small subset of managers has consistent, repeatable access to the best companies across cycles. And that access — that ability to get into the cap tables that matter — is what shifts the entire distribution.
This is why the “access game” in venture is so real. LPs don’t obsess over GP access because they’re elitist or lazy. They obsess over it because the data proves that access to top managers is the single biggest determinant of whether you’ll make money in venture.
You can’t “work hard” your way into the top 6% of funds. You can’t “add more value” your way there. The companies that drive 5x+ fund outcomes are almost entirely determined at initial investment. If you’re not in the deal, no amount of board work or strategic guidance will save you.
The Lesson for GPs (The Partners at VC Fund)
If you’re a GP pitching 5x returns, understand what you’re actually saying: you’re claiming you’ll outperform 94% of the entire VC industry.
You’re not just saying you’ll be good. You’re saying you’ll be in the 6%.
And the only GPs who consistently hit that mark are the ones who have already proven they can access and select the best companies, fund after fund, across multiple vintages.
First-time funds targeting 5x aren’t being ambitious. They’re being statistically delusional.
The Lesson for LPs
Your odds of backing a 5x fund improve by 3x when you back proven, consistent performers.
This is why fund-of-funds exist. This is why LP portfolios concentrate so heavily at the top. This is why “emerging manager” allocations remain small even when LP portfolios are explicitly trying to increase them.
The data doesn’t lie: predictability in VC comes from backing managers with proven, repeatable access to the best companies across cycles.
That’s it. That’s the entire game.
You can bet on potential. You can bet on “fresh perspectives” and “differentiated theses.” But the data shows that betting on proven access is what actually shifts the distribution in your favor.
Our Take
I’ve now raised and deployed two SaaStr VC funds and been a partner at a fund where I did 10x before that — entirely off inbound dealflow from the SaaStr community. No proactive sourcing. No competitive positioning against other VCs. Just access to companies that come to us first.
Our first venture investments did pass 10x, and our last SaaStr Fund MOIC is almost at 5x. Right in that “Core Manager” distribution.
Was it luck? Partially. Was it timing? Sure, we launched in 2017 which turned out to be a strong vintage. But the bigger truth is this: we had access to companies that most other funds never saw. We were picked.
That access came from spending a decade building the world’s largest community in B2B. We didn’t compete for deals. We got inbound. And that inbound advantage — that proprietary sourcing — is what drove performance.
Now here’s the uncomfortable truth: even with that edge, we’re just one small seed fund. Two vintages isn’t a track record. It’s a data point.
The managers in VenCap’s Core Manager cohort have done this for 15+ years. They’ve proven they can repeat it across market cycles, through bubbles and crashes, across changing tech trends and shifting founder preferences.
That’s why LPs pay the premium to get into those funds. Because the data proves it’s worth it.
Venture Isn’t “Hard Work” Per Se. But It’s Sure Not Easy to Beat Nasdaq.
A 5x VC fund is realistic — but only for a small subset of managers who have proven they can access and back the best companies, fund after fund, across cycles.
For everyone else, 5x is a pitch deck aspiration that the data says won’t happen.
And for LPs, the lesson is simple: your job isn’t to find “potential.” Your job is to find proven access. Because that’s what actually shifts the odds in your favor.
P.S. — If you’re building an AI-native B2B SaaS company and want proprietary access to 100+ top VCs without going through traditional fundraising, check out SaaStr.ai VC. We’ve already matched founders with Bloomberg Beta, 20VC, Scale VP, and others. No spray-and-pray. Just high-quality, AI-powered matchmaking.
