Vintage Year

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DEFINITION of 'Vintage Year'

The year in which the first influx of investment capital is delivered to a project or company. This marks when capital is contributed by venture capital, private equity fund or a partnership drawing down from its investors.

INVESTOPEDIA EXPLAINS 'Vintage Year'

Investors can use the vintage year of an investment to further explain its returns. Having a vintage year occur at the peak or bottom of a business cycle can affect the later returns on the initial investment. During peaks in the market, new companies are more likely to be overvalued based on the current economic outlook. This increases the expectations on an investments' return because more money is initially contributed. Inversely, companies are typically undervalued during low points in the market; because less capital is initially contributed, these companies or projects have less pressure to generate big returns.

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