Kellogg Conference Notebook: Kramich on Large VC Funds

The following is from Jason Robinson, a second-year MBA at the Kellogg School of Management. After graduate school and a postdoc in physical chemistry, Jason worked at Intel Corp.’s technology development group in process engineering. While at Kellogg, Jason interned in early stage VC at the Chicago-based I2A Fund.

Keynote Speaker: Dick Kramlich, New Enterprise Associates
Dick Kramlich’s keynote address confronted several hot topics in the venture industry – from carried interest taxation to the health of the VC model to venture investing in India and China. He offered insights from his wealth of investing experience, including a set of five principles that he uses in Monday morning meetings to drive rational investment decisions in both good and bad times.

Kramlich frequently touched on VC’s crucial role as an engine for driving innovation. Additionally, he challenged the conventional wisdom that larger funds will necessarily lead to lower performance by showing IRR performance by vintage versus each vintage average, in 5-year increments, from 1980-1984 through to 2000-2004. His data showed the IRR performance difference versus vintage average to favor the largest 10% of funds for each time block analyzed.