vintage year

Think of wine again for a second, since that is where the term borrowed its name. A bottle labelled 2015 tells you the grapes were harvested that year, and wine people know that some years had better weather, better soil conditions, better everything, so a 2015 bottle is judged against other 2015 bottles, not against a 2009 one.

Venture capital and private equity funds work the same way. A fund's vintage year is the year it closed and started writing cheques into companies. If you invested your money into a fund in 2020, that fund has a 2020 vintage, and its performance years later gets compared to other funds that also started in 2020, because they were all buying into companies under the same economic weather.

Why does this matter so much? Because timing shapes returns in ways that skill alone cannot fix. A fund that started putting money into Nigerian startups in 2019, right before a pandemic and a naira devaluation, faced a different climate than one that started in 2021 when funding was flowing generously. Judging both funds by the same yardstick without noting their vintage years would be unfair and a little dishonest.

For a diaspora Nigerian thinking of putting money into a venture fund back home, or into a UK based fund investing in African startups, asking about vintage year is a smart question. It tells you what economic conditions the fund was born into, and lets you compare it properly against its true peers rather than against funds from a completely different season.

Founders benefit from understanding this too. If you are raising money in a year when investors are cautious because the vintage before yours performed badly, you are not being punished for your own weakness. You are simply raising in a tougher season, and knowing that can help you plan your pitch and your expectations with clearer eyes.