Some startup "unicorns" are magical, and others are donkeys in party hats.
Illustration by Aleksandar Savic
By Erin Griffith
January 12, 2017

This article originally appeared in Term Sheet, Fortune’s newsletter on deals and dealmakers. Sign up here.

Over the past four years, FundersClub, an online venture capital firm, has invested in 217 companies. It has had 19 exits. Today the company published a quarterly breakdown of its returns in an effort to bring more transparency to venture capital performance, a historically un-transparent area. “The whole industry is normalized to not publish returns,’” says co-founder and CEO Alex Mittal. The company has committed to updating its returns every quarter. You can find them here.

As of the third quarter last year, FundersClub’s 2012 fund held a 2.3x unrealized net multiple and its 2013 fund held a 3.2x multiple. These are unrealized returns, which don’t really mean much if all of the firm’s portfolio companies fail.

FundersClub’s multiple for realized exits is 1.1. Mittal notes that as a four-year-old fund, that return includes companies that “either dissolved or that took an early exit.” FundersClub will mark down investments when the firm’s investment committee believes they’ve been overvalued, but not in the other direction.

A reminder: FundersClub is structured like any other limited partnership. The company’s investors are vetted high net worth individuals. FundersClub’s six-person investment committee conducts diligence on its each of its investments; once it chooses to back a company, LPs can choose to join the round. Similar to other venture firms, FundersClub does not invest in competing companies and participates in follow-on investments. Separately, the company operates FCVC, a fund for family offices, endowments and pensions.

In the past I’ve heard rumblings of complaints from FundersClub investors suggesting the firm isn’t getting the same terms as the rest of the investors on its deals. But Mittal says that’s not true: FundersClub only invests if the deal terms are identical to the other investors in the round. FundersClub has had to do some work in educating its LPs, he says. “You’ll see a disconnect where someone reads something about some company getting an exit and then wonders, ‘Why am I losing half my money or why am I only getting a 3x?’” he says. The company’s site has an education center that helps LPs understand the difference between “a real profitable exit and an exit that’s just an exit in name.”

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