In terms of median IRR, there has been a dip in overall performance among larger venture capital funds at the 10-year horizon. This is partially due to funds of that size experiencing a greater statistical disparity given the number of investments they make. That said, the fact that the median trends that low in the long term underlines the risk inherent in the venture industry, which, in light of recent fears surrounding overpriced valuations, is likely to be overemphasized. Investor sentiment in both public and private markets tends to overcorrect somewhat—accordingly, even the decent numbers seen in short-term IRRs may become overshadowed by a few high-profile disappointments.
For additional analysis on more than a decade of global VC fund performance, including metrics such as IRRs, fund return multiples and fund cash flows, check out PitchBook's 4Q 2015 Benchmarking Report.