Measuring the performance of a venture capital fund is notoriously difficult. Unlike other financial assets, VC fund returns are not public and often take up to a decade to materialize. The most relevant metric is, logically, the return to investors, but in practice this is rarely available — even internally — during the early years of a fund’s life. This combination of opacity and long maturity periods makes any assessment based on public information very challenging.
However, there are key indicators specific to each investment strategy that offer a good view of a fund’s interim performance. In the case of funds that invest at early stages, the proportion of portfolio companies that successfully raise a follow-on round is a highly relevant indicator, commonly referred to in the industry as the “graduation rate”. Early-stage mortality is very high, as highlighted, among others, by the Spain Ecosystem Report produced by Dealroom in collaboration with BBVA, which notes that 25% of startups do not survive their first year.
According to data from Crunchbase, less than 15% of startups that close a seed round are able to grow and later raise a Series A. Traditionally, the Series A is the stage that begins to systematically attract international investment as the business’s international scaling gains visibility. This graduation rate illustrates the tough job faced by entrepreneurs and early-stage investors.
The Bankinter Foundation Startup Observatory reinforces this idea, noting that last year “seed and Series A rounds declined, while the biggest bets by investment funds focused on Series B, C, and Growth rounds”. This shows that venture capital funds that manage to identify in the earliest phases the startups that will reach later growth stages will reap the greatest rewards.
Despite the figure reported by Crunchbase, there are standout examples in the Spanish ecosystem, such as Samaipata. Its first vehicle (Samaipata I, 2016) achieved an 80% graduation rate and is on track to deliver very attractive returns for its investors. The second fund (Samaipata II, 2020), with just five years under its belt, already exceeds a 60% graduation rate to Series A. An additional sign of the success of this Spanish fund’s investments is that top-tier international firms such as Accel, Creandum, or Index have led the Series A rounds of these companies.
This is happening in a context where Spain’s tech ecosystem continues to gain traction in Europe. According to the Spain Tech Ecosystem Report 2025, the total value of Spanish startups has surpassed €110 billion for the first time, doubling in size since 2020, and could close 2025 at €112 billion. This figure also exceeds the forecasts published last year. So far this year, startup investment in Spain amounts to €1.95 billion, already surpassing the total volume recorded for the whole of 2024 (€1.9 billion). According to the report, this is a “significant” volume that places Spain as the fourth largest hub in Europe by these figures.
These indicators offer a much more sophisticated view of a fund’s interim performance at early stages than other figures that tend to attract more market attention due to their availability — but which can be deeply misleading.
Luis Garay, Partner at Samaipata, explains that “one of the most widely used metrics is assets under management (AUM). It is often assumed that the bigger the fund, the better it must be. But this is not true. This metric favors funds that invest at later stages, where larger tickets are required, and managers that run multiple funds simultaneously with different investment strategies. In the U.S., there is increasing discussion about the rise of firms whose priority is to accumulate assets under management in order to maximize fee income. This model loses alignment with the goal of maximizing returns for investors.”
It is also quite common to find lists or rankings in entrepreneurship-focused media that highlight funds by the number of deals they do. A fund focused on pre-seed stages, by nature, tends to make more investments than one specialized in later stages, and this is not representative of performance.
It’s also worth mentioning, in Luis Garay’s words, that “there are funds whose strategy is not to lead rounds but to join as followers, taking minimal stakes that show little skin in the game. This allows them to get into many companies, inflating their deal count, but with less proactive support for founders.”
So if returns are unknown and the substitute metrics tend to mislead, how can a fund’s performance really be evaluated in its early years?
Based on the data from Crunchbase and numerous reports like those mentioned above, one of the best metrics to answer this question is the graduation rate — the percentage of a VC fund’s portfolio companies that manage to reach the next funding stage, where the startup must demonstrate ambitious growth rates and real market traction, with the potential to reach sufficient scale to generate outsized returns for the fund.
The graduation rate is not without limitations: there are excellent companies that do not graduate due to cyclical factors, and not all graduations are equal — the round terms matter. Moreover, the metric does not capture what happens next or later rounds. Even so, it provides an early, objective, and comparative signal of a fund’s performance. In a sector as uncertain as venture capital, the graduation rate is one of the best compasses we have to anticipate long-term value creation. “Having 70% of our portfolio companies raise a Series A with renowned international funds confirms that we are moving in the right direction and that the market validates our investment decisions,” concludes Luis Garay, Partner at Samaipata.
Photo: Samaipata’s VC team
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