The National Venture Capital Association usually prefers to track VC performance over a decade-long period, or possibly a five-year span. That’s because measuring performance over a one-year period, say, usually isn’t as useful since investment returns gyrate all over the place in the short term, according to Emily Mendell, the NVCA’s vice president for strategic affairs.
But current economic conditions prompted the Virginia-based association today to include performance results comparing the one-year period that ended June 30 with the one-year period that ended a quarter earlier, on March 31. The results, courtesy of the number crunchers at Thomson Reuters, show an 8.2 percent decrease in investment return, to 5.1 percent.
That still beats the performance of the NASDAQ and S&P 500. But because the economic downturn has basically closed the IPO window for new companies, making it much harder for VCs to cash out, that return-on-investment is expected to decline going forward, Mendell says. It’s also important to note that the latest results lag the markets’ gyrations of the past few months. As NVCA President Mark Heesen put it in a statement: “We have yet to see the full impact of the capital markets crisis in the venture capital performance numbers.”
Below is a table showing venture returns through June 30 over different time periods, and for different stages of investment.
 |
Author: Bruce V. Bigelow
In Memoriam: Our dear friend Bruce V. Bigelow passed away on June 29, 2018. He was the editor of Xconomy San Diego from 2008 to 2018. Read more about his life and work here.
Bruce Bigelow joined Xconomy from the business desk of the San Diego Union-Tribune. He was a member of the team of reporters who were awarded the 2006 Pulitzer Prize in National Reporting for uncovering bribes paid to San Diego Republican Rep. Randy “Duke” Cunningham in exchange for special legislation earmarks. He also shared a 2006 award for enterprise reporting from the Society of Business Editors and Writers for “In Harm’s Way,” an article about the extraordinary casualty rate among employees working in Iraq for San Diego’s Titan Corp. He has written extensively about the 2002 corporate accounting scandal at software goliath Peregrine Systems. He also was a Gerald Loeb Award finalist and National Headline Award winner for “The Toymaker,” a 14-part chronicle of a San Diego start-up company. He takes special satisfaction, though, that the series was included in the library for nonfiction narrative journalism at the Nieman Foundation for Journalism at Harvard University.
Bigelow graduated from U.C. Berkeley in 1977 with a degree in English Literature and from the Columbia University Graduate School of Journalism in 1979. Before joining the Union-Tribune in 1990, he worked for the Associated Press in Los Angeles and The Kansas City Times.
View all posts by Bruce V. Bigelow