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Blueprint Intelligence / Firm Narrative and Track Record / Gross versus net returns, presenting prior deals the way allocators read them
Firm Narrative and Track Record
Gross returns measure what a deal actually earned. Net returns measure what an investor would have kept after fees and carry, and for a pre-fund deal, no standard formula converts one into the other.
Gross returns and net investor returns are different measures. A net calculation reflects the relevant fees, expenses, carried interest and cash-flow timing. An SPV may have its own economics; an angel investment may have different costs. Start with what was actually charged and the records available, rather than assuming a prior deal had no fees or that its gross return is a fund return.
There is no universal ratio that converts a deal’s gross IRR into a hypothetical fund’s net IRR. A supported net calculation needs the relevant cash flows and fee, expense and carry treatment. If those inputs are absent, report the gross figure accurately rather than implying a net result has been calculated.
A weighted average of realized-deal gross IRRs is a deal summary. It is not pooled fund IRR, net performance or a cash-flow-based restatement.
Clear labels let an LP use the record without guessing. State whether returns are gross or net, realized or unrealized, and actual or illustrative. Explain what is included and what evidence is missing; precision in the label matters as much as precision in the number.
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