Venture Funds Did Badly in 2008—But Maybe Not That Badly

4/27/09Follow @bbuderi

We all know that just about every type of financial performance index for the last year showed a sharp turn downward. This definitely held true for venture capital. The National Venture Capital Association and Thomson Reuters today released Q4 2008 venture capital performance numbers showing that VC funds as a whole—early, balanced, and later stage combined—tumbled some 21 percent last year.

But if you dig deep enough into any pile of data, or go back far enough in time, you can usually find some good news. In this case, all you have to do is go back and average returns over the last three years to make the numbers come out positive. Compare that to, say, the NASDAQ or S&P 500, which doesn’t even generate a positive return when you go back 10 years—and there is the silver lining in the venture cloud. It was bad, the NVCA said, but not as bad as it could have been.

Here’s the table.

NVCA venture capital performance data

Bob is Xconomy's founder and editor in chief. You can e-mail him at bbuderi@xconomy.com, call him at 617.500.5926. Follow @bbuderi

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  • http://danweinreb.org/blog Daniel Weinreb

    I’d like to make sure I understand exactly what this table is saying. For the S%P 500, is it saying that if you invested $100 on Jan 1, 2007, then on Dec 31, 2007, you would have 100 – 36.1, or $63.90, but if you invested $100 on Jan 1, 2005, then on Dec 31 2007, you would have $90.00?

    In other words, for All Venture, the 3 Yr number of 4.2 is taking into account the fall in values during 2008?

    Thanks.