How is the venture capital industry doing? The short answer is not as well as it did 15 to 20 ago. One measure of industry performance – exits as a share of investments made five years earlier – still have not returned to 1990s levels.
Venture capitalists would like all of the companies they invest in to have a positive exit because they usually don’t make money unless the businesses they finance go public or get acquired. Therefore, exits of venture capital-backed companies tell us something about the health of the industry.
While a lot of people look at the raw number of initial public offerings (IPOs) and acquisitions to gauge the industry’s health, the number of exits is deceptive. Because venture capitalists don’t finance the same number of companies every year, the number of IPOs and acquisitions of venture capital-backed companies could simply reflect changes in the number of investments made.
To read the full, original article click on this link: The Health of the Venture Capital Industry - Forbes
