J-Curve

The characteristic shape of a Venture Capital fund’s return profile over time: initial negative or flat returns as fees are drawn and early investments are marked conservatively, followed by a steep upward curve as exits occur. Quantified by a real example: Chamath’s Social Capital fund turned $2.2B into $7.8B gross TVPI — a wildly successful outcome — but delivered only 1.3x cash back to LPs after a decade, because liquid returns require actual exits rather than paper marks. The J-curve is deep and long even in outperforming portfolios. See TVPI and Fund Returns.

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