Definition
The pattern where a venture fund initially shows negative returns as it deploys capital and pays fees, before (hopefully) shooting upward when investments exit. A graph that looks like the letter J, assuming your fund doesn't remain in the vertical downstroke forever.
Example Usage
LPs get nervous during the j-curve's downward phase, which is why fund managers spend years explaining that losing money is part of the plan.
Origin
Economics term for various delayed-return phenomena, applied to venture capital fund performance
Fun Fact
The j-curve is why venture funds typically have 10-year lifespans—it can take 5-7 years before the curve turns upward and LPs see if their bet paid off.
Source: Venture capital fund performance terminology
Related Terms
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See “j-curve” in Corporate Speak, Gen-Z Slang, Pirate Speak, and more.
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