Last Year’s Financial Turmoil Pinches Short Term Venture Returns

Last year’s volatile financial markets have begun to hurt short-term venture returns. No surprise in that.

Long-term returns so far remain untouched.

Third-quarter returns slipped into negative territory and one-year returns retreated from a mid-year peak, according to data released Wednesday by Cambridge Associates and the National Venture Capital Association.

Meanwhile, 10-year returns rose, as did the 15-year payback, the data show.

There is little doubt the near closing of the IPO window contributed to the rough patch.

Here are the details:

  • Third quarter returns of -0.7% fell from 7% in the second quarter.
  • One-year returns pulled back to 20.9% from 26.3% in the second quarter.
  • Ten-year returns rose to 2.6% from 1.3% and 15-year returns edged up to 31.7% from 30.9%.

Below is a chart of one-year returns. A press release with the numbers is available on this Web page.