Venture capital distributions set 14-year record last year

Venture capital distributions set a 14-year record last year with more money and stock going back to LPs than in any year other since 2000.

Distributions of $30 billion were up 37.3 percent in 2014, marking the third year in a row of breakout performance, according to Cambridge Associates. Distributions added up to $57 billion in 2000 at the height of the dot-com bubble.

The strong performance now means that venture capital funds have distributed more capital than they have called for 12 straight quarters. The industry has not seen a similar cash flow trend since the late 1990s, Cambridge said.

For all of 2014, the industry called $15.3 billion in capital, an increase of 15.1 percent from 2013.

VC returns also stayed at a high level last year, with venture capital performance besting the public markets for all time periods except the three-year period.

The industry ended 2014 with a one-year performance of 21.5 percent, compared with a 13.4 percent gain for the Nasdaq Composite. The five-year return was 16.1 percent compared with the 15.9 percent of the Nasdaq.

Cambridge said its venture capital index last year generated the third highest return of the past 15 years, trailing only 2013 and 2000. Health care, information technology and software investments were the largest contributors.

Photo courtesy of Shutterstock. Chart below courtesy of Cambridge Associates.