A lot of LPs dismiss VC Fund of Funds immediately, and one of the reasons you’ll hear often is “double fees.”
But here’s a (data-driven) reason for them to reconsider that position…
John Felix from FoF Pattern Ventures analyzed PitchBook performance benchmarking data from 2005-2019, comparing net TVPI for the entire VC universe (“Direct VC” on the left side of the image above) versus VC FoFs (right side of the image above).
His findings 👇🏻
💪 FoFs outperformed direct VC in 14 of 15 vintage years at the median
📊 Average outperformance of 0.68x TVPI (even after “double fees”)
✌🏻 Bottom quartile FoFs stayed above 1x in every vintage (direct VC didn’t)
Some reasons for this …
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