American venture capital needs a reboot. A decade of insufficient shrinkage hasn’t fixed wimpy performance. At 6.1 percent annually over 10 years to September, according to Cambridge Associates and the National Venture Capital Association, V.C. fund returns undershoot boring stock indexes like the Nasdaq and the Russell 2000.
Last year, V.C. outfits raised $20.6 billion of new committed funds, according to the National Venture Capital Association and Thomson Reuters. That’s about 10 percent more than in 2011. Unfortunately, distributions from funds have lagged the cash put in since 1999. Last year’s tally is also more than five times the average amount raised annually by V.C. firms in the decade leading up to the dot-com bubble. The bust happened, but the venture capitalists’ appetites never took the same dive.
To read the original article: Venture Capital's Sluggish Performance - NYTimes.com
