The Future of Venture Capital Is Gross

I spent a bit of time yesterday perusing U.S. VC performance numbers from Cambridge Associates, which are available on the firm’s website. Data is through the end of Q3 2009, and is predictably depressing. If you exclude 10-year returns (because they still include part of dotcom-delirious 2000), the net means either are negative or pathetically positive. For example, the best number would be six-year net mean IRRs, which come in at just 5.65 percent. And those are pooled. If you look instead at vintage years, it’s even worse (best one post-1998 is 3.75 percent). All of this plays into the “VC model is broken” mantra that many now consider conventional wisdom.

ManagersNorth AmericaUSBriefs