Start With What the Fund Actually Invests In
Before comparing numbers, check what stage and sector the fund focuses on, and whether that matches what you are actually looking for. A fund with excellent results in one stage or sector will not necessarily repeat that in another.
It also helps to check fund size and typical check size. A very large fund writing small checks behaves differently from a smaller fund writing large, concentrated checks, even if both are called venture capital.
Check the Team, Not Just the Fund Name
A venture fund's results usually come down to the specific people making decisions, not the fund's brand name alone. Ask how long the current team has worked together, and whether the people responsible for past successes are still active in the fund.
A strong track record built by a team that has since left the fund tells you less about what to expect going forward than a track record built by the people still making decisions today.
Look at Real Numbers, Not Just the Best Story
Ask for the fund's actual performance numbers, not just its best-known success story. One great company in a portfolio does not tell you how the fund performs on average, across all of its investments.
It also helps to ask how much of the fund's reported value has actually been returned as cash to investors, compared to value that still exists only on paper. This is exactly the difference between DPI and TVPI, two metrics worth understanding before comparing any fund.
Ask About Access and Follow-On Capacity
A fund's ability to get into good deals in the first place, often called access, matters as much as its judgment once it is in. Ask how the fund typically finds its opportunities, and whether other investors compete to bring it into rounds.
Also check whether the fund keeps money in reserve for follow-on investments in its winners, since the ability to keep backing a successful company across multiple rounds is often where real returns are made.
Key takeaways
- Check that a fund's stage and sector focus genuinely matches what you are looking for.
- Look at the specific team making decisions today, not just the fund's overall brand or history.
- Ask for real performance numbers across the whole portfolio, not just the best single story.
- Check the fund's access to good deals and whether it reserves capital for follow-on investments.
Related questions
What is the single most important thing to check before choosing a VC fund?
There is no single most important thing, but understanding who is actually making decisions, and whether they are still active in the fund, is a strong starting point.
Should I trust a fund's best success story as proof of skill?
Treat it as one data point, not proof. Ask for performance across the whole portfolio, since one great outcome does not tell you how the fund performs on average.
Need personalized advice?
Schedule a conversation about your private market allocation goals.
Request an Advisory Call