ALL INPredictions
Last updated Nov 29, 2025
Prediction
Chamath
← Back to hostEpisode
Chamath @ 00:58:22Inconclusive
venture
Future average venture-capital fund returns (relative to historical averages) will decline by roughly 50–100%, i.e., be between half and zero of prior levels, as the post-2020 bubble vintages season and are realized over the coming years.
So I do think that we are in a situation where the average returns are going to decay by 50 to 100% because of what Sachs said and because of what you said.View on YouTube
Explanation

As of November 30, 2025, there is not enough realized data on post‑2020 venture capital vintages to say whether average VC fund returns will ultimately be 50–100% lower than historical norms.

Key reasons:

  1. VC fund outcomes are inherently long‑dated. Typical venture funds are structured for ~10–12 years, and many now take 15–20 years to fully return capital; most value realization happens in years 7–10+ and often later. (commonfund.org) That means funds raised around 2020–2022 are still in their early or mid investment period in 2025.

  2. J‑curve and lack of distributions show we are still early. Analyses of VC J‑curves show that the negative or flat part usually lasts several years, and Carta’s 2024 data notes that more than 60% of 2019‑vintage VC funds had not distributed any capital back to LPs even after five years. (carta.com) If 2019 vintages are still largely unrealized, 2020–2022 bubble‑era vintages are even further from their true, realized performance.

  3. Interim performance is mixed and not predictive of final returns. Cambridge Associates’ 2023–2024 benchmarks show that recent VC vintages (2014–2022) have had weak to slightly positive annual returns, with many pre‑2020 vintages negative in 2023 and some post‑2020 vintages (like 2022) positive in 2023–2024. (cambridgeassociates.com) These are mark‑to‑model/mark‑to‑market snapshots, not final cash‑on‑cash outcomes, and industry analysts explicitly warn that early TVPI/IRR after a few years is not a reliable indicator of eventual fund multiples.

  4. Current underperformance vs public markets doesn’t fix the long‑run multiple. Recent commentary notes that VC returns over the last year have been around -1%, versus roughly +20% for public equities, and distributions to LPs in 2023–2024 are far below peak years, contributing to weak fundraising and LP fatigue. (wsj.com) This indicates pressure on the asset class and raises the odds of lower eventual returns—but it still doesn’t tell us whether final average vintage‑year multiples will end up half of, equal to, or only modestly below historical norms.

Because:

  • the relevant 2020–2022 "bubble" vintages are only ~3–5 years into what is likely a 12–20 year realization arc, and
  • core outcome metrics like DPI (cash returned) and final net multiples are largely unknown for those vintages,

we cannot yet quantitatively determine whether average VC fund returns will be 50–100% lower than historical averages. There are signs consistent with stress and potentially lower future returns, but the prediction is about ultimate average realized performance, and that won’t be observable until well after 2025. Therefore the status of this prediction is inconclusive (too early to tell).