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Patient capital waits longer for returns. Perpetual capital never exits. The difference matters for missions that outlast any investor's time horizon.
Accepts longer timelines (7-15 years) before exit. Still expects to eventually return principal plus gains. Waiting, not staying.
Key question: "How long until we exit?"
Designed to never exit. Principal preserved indefinitely while returns continuously deploy toward mission. Staying, not waiting.
Key question: "How do we sustain impact indefinitely?"
| Dimension | Patient Capital | Perpetual Capital |
|---|---|---|
| Definition | Capital with longer-than-typical time horizons (7-15 years) | Capital that never exits—principal preserved, returns deployed |
| Exit expectation | Eventual exit, just delayed | No exit expected—structure designed for indefinite operation |
| Return model | Terminal return at exit (IRR focused) | Continuous return through deployment (yield focused) |
| Principal | Returned at exit | Preserved indefinitely |
| Suitable for | Long-cycle projects with eventual liquidity | Missions that outlast any investor's time horizon |
| Examples | Long-term VC, infrastructure funds, Breakthrough Energy | Endowments (partially), IRSA's PSC model |
Patient capital wants exit in 10-15 years. Institutions take 30-50 years to mature.
Climate adaptation requires 50-100 year horizons. No investor has that patience.
Fundamental research takes decades. Applied research takes years.
Patient capital is still terminal capital with a longer timeline. Eventually, it must demonstrate returns and exit. This creates predictable dynamics:
Perpetual capital removes this trajectory by design. No exit window means no exit pressure means mission timelines can actually match organizational timelines.
Patient capital is investment with longer-than-typical time horizons, usually 7-15 years versus the typical 3-5 year venture cycle. It accepts lower liquidity and delayed returns in exchange for backing longer-term opportunities. However, it still expects eventual exit and return of principal plus gains.
Perpetual capital is designed to never exit. Principal is preserved indefinitely while returns are continuously deployed toward mission. Unlike patient capital (which waits longer for exit), perpetual capital has no exit expectation—the structure is designed for indefinite operation.
For missions that outlast any investor's time horizon (institutions, climate, fundamental research), even patient capital creates exit pressure before the mission completes. Perpetual capital removes this pressure by design, allowing multi-generational missions to develop on their own timelines.
Endowments partially fit this model (principal preserved, returns deployed) but often restrict deployment. IRSA's Perpetual Social Capital (PSC) model proposes perpetual structures with active mission deployment—preserving principal while continuously cycling returns into impact.