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Miles Dieffenbach: Inside Carnegie Mellon’s $4BN Endowment & The Math Behind DPI, TVPI, Illiquidity

Miles Dieffenbach is Managing Director of Investments at Carnegie Mellon University, where he helps oversee a $4 billion endowment with a focus on venture capital, private equity, and alternative investments. Under his leadership, CMU’s private book has remained self-funding during some of the toughest years for liquidity. ---------------------------------------------- In Today’s Episode We Discuss: 00:00 Intro 01:00 "I Had Cancer at 26 – It Changed Everything" 04:31 Inside the $4BN Carnegie Mellon Endowment: The Investment Blueprint 08:28 Are LPs Getting Screwed in Venture? 10:04 90% of LPs Shouldn’t Be in Venture – Here’s Why 11:55 Seed Funds Are a Trap (And No One Wants to Admit It) 35:29 The $140BN Problem with Multi-Stage Funds 42:22 "Index Is the Best in the Game” – Here's Why They Win 01:01:03 Yale vs. Harvard Analysis 01:11:02 Cash-Rich Giants vs. Liquidity Drought: The Market Paradox 01:20:32 When Founder-Friendly Goes Too Far 01:22:43 Quick-Fire Round ----------------------------------------------- Subscribe on Spotify: https://open.spotify.com/show/3j2KMcZTtgTNBKwtZBMHvl?si=85bc9196860e4466 Subscribe on Apple Podcasts: https://podcasts.apple.com/us/podcast/the-twenty-minute-vc-20vc-venture-capital-startup/id958230465 Follow Harry Stebbings on X: https://twitter.com/HarryStebbings Follow Miles Dieffenbach on X: https://twitter.com/Curiousjorge65 Follow 20VC on Instagram: https://www.instagram.com/20vchq Follow 20VC on TikTok: https://www.tiktok.com/@20vc_tok Visit our Website: https://www.20vc.com Subscribe to our Newsletter: https://www.thetwentyminutevc.com/contact ----------------------------------------------- #20vc #harrystebbings #milesdieffenbatch #carnegiemellonuniversity #managingdirector #vc #lp #ai

Miles DieffenbachguestHarry Stebbingshost
Aug 3, 20251h 30mWatch on YouTube ↗

At a glance

WHAT IT’S REALLY ABOUT

Inside CMU’s Endowment: Why Most LPs Should Avoid Venture Capital

  1. Carnegie Mellon’s Myles Dieffenbach explains how the university runs its $4B endowment, with an 85/15 equity–fixed income split and roughly 50% in private markets, and why he believes most LPs are not being adequately compensated for the risk they take in venture capital.
  2. He walks through the math behind TVPI, DPI, and public market equivalents (PMEs), arguing that only top‑decile venture funds outperform public tech indices like the QQQs, and that mega‑funds’ sheer AUM makes repeat 4x net outcomes mathematically implausible.
  3. The conversation dissects GP behavior, fund sizing, fee structures, LP churn, secondaries, and the rise of multi‑stage platforms, while also covering illiquidity, the broken IPO market, and why 2026+ could finally see a wave of liquidity.
  4. Interwoven are candid views on manager selection—access vs picking, reference checks, alignment, GP commits—and broader themes like AI bubbles, NVIDIA, OpenAI’s risk profile, and what ‘founder‑friendly’ really should mean.

IDEAS WORTH REMEMBERING

5 ideas

Only top‑decile venture funds consistently beat public tech benchmarks.

Cambridge data shows median net IRR in venture around 8%, with top‑quartile DPI only ~1.8x; once you compare to the Nasdaq‑100 PME, even many top‑quartile funds fail to justify their illiquidity and risk.

Most LPs should not be in venture unless they have true top‑decile access.

Dieffenbach argues 90% of LPs lack the relationships and selection skill to access the few managers that create outsized value, making public tech exposure a better risk‑adjusted choice for most allocators.

Mega venture funds are structurally misaligned with LPs’ return targets.

When a platform raises, say, $7B across vehicles with ~5% average entry ownership, it must underwrite ~$800B of eventual market cap to deliver a 4x net—a scale of outcomes the historical IPO/M&A data simply doesn’t support.

Fund size discipline and fee structure design are now crucial edge factors.

Firms like Index are praised for resisting AUM bloat and prioritizing performance; Dieffenbach advocates full‑fat fees (even 2.5–3%/30%) for true early‑stage funds, but ‘public‑equity’ economics (around 1%/10%) for late‑stage growth vehicles that behave like passive capital.

LPs must underwrite illiquidity explicitly and build new muscles on marks.

CMU now re‑underwrites the top 10 NAV positions in every fund, tests manager marks, and is acutely aware of tail outcomes (e.g., Circle turning a 13‑year, nearly‑ignored position into multiple extra turns on a fund), as well as the risk of selling secondaries too cheaply.

WORDS WORTH SAVING

5 quotes

My question to any new allocator or an investor is, do you think you're going to have access to top decile managers? Because at that point, top decile, you are achieving returns above the PME consistently. But below that, even top quartile, you're not.

— Myles Dieffenbach

I study, I live, I eat, I breathe investing. These business models these GPs are creating are some of the best high-margin businesses ever created.

— Myles Dieffenbach

For the longest period of time, private market capital was cheaper than public market capital, which is the most mind-boggling statement as, like, a fundamental investor ever.

— Myles Dieffenbach

The median IRR is about 8% net for [venture] and top quartile DPI from 1998 to 2015 is 1.8x. You don’t look at that data on a $7 billion fund and think, ‘We will pay whatever we need to get into those funds.’

— Myles Dieffenbach

This fund was essentially going to do an extra three turns on the fund in its thirteenth year. That’s the risk of selling secondaries as a long-term venture investor.

— Myles Dieffenbach

Carnegie Mellon’s endowment model and portfolio constructionRisk–return math in venture: IRR, TVPI, DPI, and PMEsWho should (and shouldn’t) allocate to venture capitalFund size, multi‑stage platforms, and broken GP–LP alignmentFee structures, GP commitments, and LP underwriting practicesLiquidity drought, secondaries, and the IPO/M&A environmentAI, mega‑exits, and the limits of extrapolating tech outcomes

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