Who Will Be The Biggest Loser: 1999 VC Funds or 2006 PE Funds?
1999 vintage Venture Capital funds are infamous for being some of the worst performing private investment funds of recent memory with the average 1999 Venture Capital fund returning only about $0.95 on the dollar through 6/30/08. The poor returns of these 1999 funds are a result of two main factors: These funds were raised at or near the height of the tech bubble. These funds were often fully invested within 12 months of closing. The result was a ton of money invested very quickly at very high valuations. During the 3 year market correction that followed the tech bubble, venture capital lost favor with many institutional investors. Many of these same investors instead plowed their investment dollars into private equity funds. These funds enjoyed huge returns early
