Assets Under Management (AUM) is a measure of the total value of assets that a venture capital (VC) firm is responsible for managing on behalf of its investors. AUM includes all of the funds that the VC firm has raised from its investors, as well as any investments that the firm has made using those funds.
AUM is an important metric for VC firms because it indicates the size and scale of their operations and their ability to make large investments in startups. A larger AUM allows a VC firm to make more investments and spread its risk across a larger portfolio of companies.
VC firms typically raise funds from a variety of investors, including institutional investors, family offices, and high net worth individuals.
These investors are known as limited partners (LPs) and they provide the capital that the VC firm uses to make investments.
In general, the AUM of a VC firm can vary greatly depending on its stage of development and the size of its funds. Early-stage VC firms may have AUM in the tens of millions of dollars, while more established firms may have AUM in the billions.
It's important to note that AUM is not the same as returns, AUM is a measure of the amount of money a VC firm is managing, while returns are a measure of the performance of the investments made by the firm.