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FinanceVenture Capital

Exclusive: Is this the best-performing VC fund ever?

By
Dan Primack
Dan Primack
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By
Dan Primack
Dan Primack
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January 8, 2015, 10:48 AM ET
7th Annual Crunchies Awards
SAN FRANCISCO, CA - FEBRUARY 10: Chris Sacca wins the Angel of the Year award at the 7th Annual Crunchies Awards at Davies Symphony Hall on February 10, 2014 in San Francisco, California. (Photo by Steve Jennings/WireImage)Photograph by Steve Jennings — WireImage

Can you name the best-performing venture capital fund in history?

My guesses would have been something from the dotcom era or a fund that got in early with Google (GOOG) or Facebook (FB). But yesterday I was leaked some confidential documents from a limited partner in Lowercase Ventures Fund I, an $8.4 million seed fund that closed back in 2010. Active portfolio companies include Uber, Docker, Optimizely and StyleSeat, while exited deals include Instagram (sold to Facebook) and Twitter (TWTR).

This would appear to be the winner, at least from a return multiple perspective.

Through Q3, the fund had returned 3.47x of called capital and was “sitting on an additional 76.19x net value.” But that Q3 timing is important, because it does not reflect the massive Q4 appreciation that would have occurred after Uber’s most recent financing at around a $40 billion valuation.

If you update Uber’s fair market value from the $62.05 per share mark in the Lowercase doc to the new $133 per share figure, the fund’s overall return multiple on committed capital climbs to a whopping 216x. Or, in real dollars, nearly $1.3 billion on just under $6 million in call-downs (including approximately $23 million in cash and stock distributions for exited companies).

Finally, from what I can tell, there are no management fees currently being paid.

I asked the folks at data provider Preqin to send over their list of top-performing VC funds in history, and they don’t have anything that has (admittedly unrealized) gross multiples close to this (including from the dotcom era). There are certainly funds that have returned more hard cash — particularly given that equity commitments were much larger to begin with — but if you do know of something with better multiples, please be sure to let me know.

Lowercase founder and partner Chris Sacca declined comment, likely because the docs include a warning about how “loose lips sink returns.”

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By Dan Primack
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