What percentage of VC funds beat the market?

There is a common narrative or belief says that only the top 20% of VC funds beat the market (equity stock market indices). Some of the best known Venture capitalists in the world, such as Fred Willson, say this assertion is not necessarily true, that you don’t have to be in that top group because the percentage that beats the market is much higher.

In this recent paper the authors demonstrate that the percentage is 50%, in other words, half of all VC funds beat the market. A simple strategy is a fund of VC funds.

One of the problems is that these investment vehicles are only available to institutional investors. The big problem with VC is liquidity, they are illiquid investments and illiquid markets.

Although if they were fully liquid, perhaps their returns would not be so high. Or not.

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