Here's how you can assess the performance of a Venture Capital firm.

Evaluating a venture capital (VC) firm begins with examining its track record. Check out their investment history and how the companies they backed have done. The top-notch VC firms usually have a bunch of businesses in their portfolio that either made it big through IPOs or got snapped up for big bucks. This kind of track record is a dead giveaway that they're good at picking the winners and supporting them right. Plus, don't forget to look at how long they've been killing it for—consistent long-term success beats a few recent wins any day!

Evaluating the performance of a venture capital firm requires a comprehensive assessment that includes measures such as Distributions to Paid-In (DPI) and Total Value to Paid-In (TVPI), alongside metrics like IRR. Each return measure offers unique insights into different aspects of the firm's performance, providing a holistic view that is critical for evaluating the venture capital fund and making investment decisions.

To really get the lowdown on a VC firm’s chops, you gotta dive into their ROI metrics. Look at the internal rate of return (IRR) and cash-on-cash return to see how their bets are paying off. IRR gives you the annualized returns, which you can stack up against what's typical in the biz. Cash-on-cash return is like how much bang they’re getting for their buck, in plain cash terms. Just remember, these numbers need to be looked at over a good stretch of time to really tell the full story of their venture game.

This is a tricky one. Specifically in post-ZIRP times. It is not yet clear where the new equilibrium settles. A lot of FoF are pulling out of emerging managers and into the household names.

Having domain experience and expertise is extremely helpful to the portfolio companies to learn from and for the investors to mitigate risks that are taken when investing. ??Experience in the industry usually brings attention to nuances and hurdles that can be anticipated that many miss. ??Interest in the industry fosters more learning that adds to the experience of the founders. ??Networks that can help accelerate partnerships, and customers, or open doors can make or break the company. ??Credibility in the space can help companies open doors to get opportunities that may not be open to many. Industry expertise can mitigate risk, engage important stakeholders, and increase the chances of portfolio success. Good luck out there!

Just "any money" given by a VC cannot always be beneficial for the startups and we see many teams that are not supported further by the venture capital firms. Unfortunately, there are many situations of "spray and pray strategies" but we are trying not to do that and to show the good practice. In my opinion, the VC needs to be there for the startup and the team, providing them with network connections, domain knowledge, expertise, etc. First-time founders are usually not prepared for the VC world and some of them go for the 1st given opportunity while they actually need to be more careful.

Sector expertise and value addition work hand-in-hand in creating a growth engine for the portfolio company. While depth of knowledge is critical to identifying and advising companies, breadth of knowledge complements a VC's offerings. By providing introductions and facilitating interactions between its other portfolio companies, VCs can leverage expertise in adjacent technolgies/specialities more efficiently and drive growth more rapidly.

Every VC needs a clear plan to secure exit before making an investment. It is important to deep dive the following factors to evaluate the exit potential of the startup: market liquidity (how many M&A and IPO deals in the sector), big players with a build-on strategy? (Who are the players that adopt an external growth strategy in my market ? ), future market trends (is it a buzz market or longstanding trend?), future exit price (how much are similar ventures valued? And would it allow me to achieve my ROI?)

References and survey of current and previous portfolio companies is the best way to "measure" value add provided by the fund. Non-cash value add cannot be quantified, though it's more about people and how do they "feel" that impact.