The second item was that the median time from investment in a company to the company's initial public offering (IPO) is now 8.2 years. Compare this to the short 3.1 years from initial investment to IPO in 2000 (the peak of the dot-com bubble). The longer time it takes for an exit can negatively impact the returns for a fund. Also, the longer the holding period for an investment means that fund terms will extend. Most VC funds have headline terms of 10 years with two one-year extensions at the option of the general partner of the fund, for a total of 12 years. However, in my experience, the terms of VC funds, particularly early-stage venture funds is more like 15-16 years, and is slowly expanding with time. This expansion of holding periods and fund terms leads me to a conclusion that venture funds need to have a mechanism for VCs to focus on the time value of money when they make their investments - such as an annual rate of return hurdle before they can earn carried interest. But that's a topic for another post...
Link to article:
https://venturebeat.com/2017/05/19/vc-investing-still-strong-even-as-median-time-to-exit-reaches-8-2-years/