US Venture Capital Index Returns for the Periods ending
6/30/2009, 3/31/2009 and 6/30/2008
For the 1 3 5 10 15 20
period ending Qtr. Year Years Years Years Years Years
------ ------ ------ ------ ------ ------ ------
June 30,
2009 0.2 -17.1 1.3 5.7 14.3 36.3 22.7
March 31,
2009 -2.9 -17.5 1.3 5.8 26.2 34.2 22.5
June 30,
2008 0.4 4.7 13.3 11.5 33.9 33.4 21.9
Other indices at June 30, 2009
DJIA 12.0 -23.0 -6.3 -1.7 -0.4 8.1 9.0
NASDAQ
Composite 20.1 -20.0 -5.5 -2.2 -3.74 6.6 7.5
S&P 500 15.9 -26.2 -8.2 -2.2 -2.22 6.9 7.8
Source: Cambridge Associates LLC
Note: Because the US Venture Capital index is cap weighted, the largest
vintage years mainly drive the index's performance.
"We are now entering a period of time when the stark differences between
today's exit market and the exit market ten years ago will be manifested in
the return numbers in a meaningful way," said Mark Heesen, president of the
NVCA. "Without a stronger IPO market, and by stronger I am suggesting a
multiple of 8 to 10 times the current volume, these longer term performance
numbers will continue to deteriorate over the next few years. Venture
capital may still outperform the other major market indices, but by far
less than the industry did in the last decade."
Said Peter D. Mooradian at Cambridge Associates, "The exit environment
certainly needs to improve for the venture industry to generate strong
returns for investors. But we believe that a sustained and meaningful
industry shakeout emanating from the 2008 financial crisis will improve the
competitive environment and entry valuations, another important component
of the return equation."
Vintage Year Return Ratios
The following chart illustrates the relationship between the dollars
contributed to venture capital funds by limited partners and the dollars
distributed back to them by vintage year. The chart also incorporates the
Net Asset Value (NAV) of the portfolio at 6/30/09 for an overall ratio.
For example, the 1998 vintage year funds have already returned in cash 1.29
times the amount of contributions received from LPs. If you account for
the current NAV of existing portfolio, the ratio increases to 1.45 times.
However, it is important that the NAV is unrealized and will change as
companies exit the portfolio, are revalued, or are written off. The 1995
vintage year funds have the most positive ratio, returning 5.98 times the
cash contributed by LPs, a number which rises to 6.06 should those funds
realize the value of what is currently in the portfolio. Later vintage
years have yet to return significant cash to LPs as most funds do not begin
return dollars until after year 5.
Vintage Year Return Ratio Chart
LP Distributions/ Current NAV/ LP Distributions and NAV/
Vintage Year LP Contributions LP Contributions LP Contribution
----------------- ---------------- -------------------------
1981-1994 3.23 0.01 3.24
1995 5.98 0.07 6.06
1996 4.36 0.08 4.45
1997 2.79 0.10 2.89
1998 1.29 0.16 1.45
1999 0.62 0.26 0.88
2000 0.46 0.47 0.92
2001 0.37 0.61 0.98
2002 0.39 0.64 1.02
2003 0.31 0.78 1.09
2004 0.14 0.84 0.98
2005 0.09 0.83 0.92
2006 0.03 0.89 0.92
2007 0.00 0.84 0.84
2008 0.00 0.87 0.88
Overall 1.11 0.42 1.53
Additional Performance Benchmarks
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.
Cambridge Associates derives its U.S. venture capital benchmarks from the
financial information contained in its proprietary database of venture
capital funds. As of June 30, 2009, the database is comprised of 1,281
venture funds formed from 1981 through 2009 with a value of approximately
$89.5 billion.
The National Venture Capital Association (NVCA) represents more than 400
venture capital firms in the United States. NVCA's mission is to foster
greater understanding of the importance of venture capital to the U.S.
economy, and support entrepreneurial activity and innovation. According to
a 2009 Global Insight study, venture-backed companies accounted for 12.1
million jobs and $2.9 trillion in revenue in the U.S. in 2008. The NVCA
represents the public policy interests of the venture capital community,
strives to maintain high professional standards, provides reliable industry
data, sponsors professional development, and facilitates interaction among
its members. For more information about the NVCA, please visit
www.nvca.org.
Founded in 1973, Cambridge Associates delivers a range of services,
including investment consulting, outsourced portfolio solutions,
independent research, and performance monitoring and tools across all asset
classes, to approximately 850 institutional and private clients worldwide.
The firm has advised clients on alternative assets since the 1970s and
compiles the performance results for more than 2,000 private partnerships
to publish the Cambridge Associates U.S. Venture Capital Index® and
Cambridge Associates U.S. Private Equity Index®, which are widely
considered to be the industry-standard benchmark statistics for those asset
classes. In total, the firm has over 950 employees serving its client base
globally and maintains offices in Arlington, VA; Boston; Dallas; Menlo
Park, CA; London; Singapore, and Sydney, Australia. For more information
about Cambridge Associates, please visit www.cambridgeassociates.com.
Contact Information: Contact: Emily Mendell NVCA 610-565-3904 Adria Greenberg Cambridge Associates 212-255-8386