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Our Returns

Brightspark 10 years performance:

66% net Internal Rate of Return (IRR)

 

 Our returns, benchmarked*

Net IRR
Brightspark 10 years

66%

Top decile 10 y/o funds
(source: Pitchbook)
32%
VC average 10 y/o
(source: Cambridge)
10.6%
S&P 500 7.93%


Frequently asked questions


Is Brightspark’s success based on one or two major exits, or a long track record?

Brightspark has had multiple exits creating positive returns for investors. In the last 10 years:

Some of the companies included in these calculations are still active in the portfolio – which is why they have not produced significant returns yet. Most portfolio companies stay constant at 1x the capital until a significant event occurs such as refinancing or exit. It is important to know that the IRR of early-stage investments fluctuates as companies and markets rise and fall, as information becomes known that previously was unknown, and with the passage of time.

 

What investments are included in Brightspark’s return calculations?

The 66% IRR calculation includes all investments made by the Brightspark team since 2007, including the ones where some capital was lost. Out of the 10 companies included, 4 were portfolio companies in Brightspark Ventures Fund II (2005 vintage), 1 company was founded and operated by Brightspark partners, and 5 are companies from Brightspark’s new model. We calculated the net IRR as if all investments would have been made based on our new model of 15% carry and 1.5% management fees for 3 years. This makes for a fair apples to apples calculation across all investments.


What does IRR mean and how it is calculated?

Most investors agree that when measured correctly, the IRR is the best way to evaluate venture returns. IRR is the annualized effective return rate which can be earned on the invested capital in a portfolio. The calculation takes the element of elapsed time into account, which is highly important for venture capital because cash flows aren’t distributed in a periodic, predictive way like interest payments from a treasury bond, or dividends from a well-established stock. Read more about our methodology

 

Can I expect similar returns for all future Brightspark investments?

Past performance is no guarantee of future results. Any historical returns or unrealized returns may not reflect actual future performance of Brightspark investments. All securities involve risk and may result in loss, and startup investing is particularly risky and may result in total loss.

Is it also important to remember that VC returns take many years to fully play out, and that this early data should not be viewed as definitive given the inevitable ups and downs still to come. It typically takes startups 4-7 years to see an exit through IPO or acquisition, and it may take even longer. Full risk disclaimer

 


 

*The data in table reflects net multiples and net IRRs for the vintage year displayed, updated as of the date of the most recent Pitchbook data and the Cambridge Associates VC Index report (September 30, 2016) . We cannot guarantee that they are accurate.