deployment velocity

Definition

The speed at which a venture fund invests its committed capital, often scrutinized as a metric of both deal flow quality and fund discipline. Too slow suggests weak deal flow; too fast suggests poor judgment and FOMO.

Example Usage

Our deployment velocity averaged $2M per month in year two, right in line with our investment strategy and fund model.

Origin

Venture capital operations terminology emerging in the 2010s as funds became more metrics-focused

Fun Fact

The 2020-2021 bubble saw many funds dramatically increase deployment velocity, a decision numerous GPs now regret as valuations corrected.

Source: Venture capital fund management and performance analysis

Related Terms

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Advanced

drag-along

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death spiral financing

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runway extension

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Elevator Pitch

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🚀 Startup / VC

Intermediate

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🚀 Startup / VC

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