If the market average return in venture in early stage investing is going to be 6%, remember it's it's not evenly distributed. So you know, 80% of funds could end up having net negative real returns and 20% make money. And then there'll be a very few that will make real money.View on YouTube
It is too early to evaluate this prediction.
Friedberg is talking about the current and upcoming early‑stage venture cohorts in a high‑rate environment, i.e., funds investing roughly in the early‑ to mid‑2020s. Standard VC and early‑stage fund lives are ~10–12 years, and performance (net IRR and net multiple) is typically only meaningfully known well after year 7–10, once exits and write‑downs have largely played out. Public benchmarks (e.g., Cambridge Associates, PitchBook, Preqin) only have early, highly volatile marks for 2020–2024 vintages, and no one can yet say what their final net annual returns will be, nor the final distribution of winners vs. losers across funds.
Because:
- 2020–2025 vintages are only 0–5 years old as of late 2025, and
- VC performance for a vintage can change dramatically between year 3 and year 10,
we cannot yet know whether the industry‑wide average will settle near 6% real annually or whether ~80% of funds will end up with negative real returns and only a small minority will be big winners. Therefore the prediction’s correctness is inconclusive (too early to tell).