Friday, 18 February 2011

Most venture capital funds lose money

"The median net return to VC fund investors has not been positive for any vintage year since 1998. Just think about that for a moment. Despite the past decade's many hits (Google, YouTube, EqualLogic, etc.), the typical VC fund has lost money for its limited partners. Even the top-quartile benchmarks aren't very impressive over the past decade, with the best figure coming in at 5.59% for 2001 vintage funds.

No wonder how many institutional investors have mostly turned their back on venture capital as an asset class. If things don't turn around soon, even some of the holdouts might begin to reconsider.

Cambridge today also released private equity performance data, showing positive numbers across the board. Private equity outperformed venture capital for the 1, 3, 5 and 10-year periods. It fell short for the 15 and 20-year periods."

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