It is good to see that 10 year venture capital returns are becoming positive as the dotcom bubble burst is leaving the average. Cambridge Associates has data showing that Q2 2012 returns are 5.3%. From the press release, “there was continued improvement in the 10-year period as the strong down quarters of 2001-2002 continued to roll out of the calculation. Additionally, the venture capital index outperformed the DJIA, NASDAQ Composite and S&P 500 across most time horizons with the exception of the 3- and 10 –year periods.”
Note that the returns are highest for the expansion and later stage funds in the 10 horizon. A lot of funds (as in the big, well known successful funds) have now raised either huge multi-stage funds, or growth and early stage funds. We’ll see how they perform now that there is more competition at these fund sizes. There was obviously some aggressive (dare I say crazy?) late late late non-strategic investments in companies like Facebook early last year and the year before. I’ve blogged about those late stage investments being really aggressive before.
I’m having problems actually linking to the press release, but according to the release: “To view the full, comprehensive report, which includes tables on additional time horizons, vintage years, and industry returns, please visit the Cambridge Associates or NVCA websites.”