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We’ve been talking a lot lately about the wild valuations being attached to fast-growing Internet companies, something that would make most venture capitalists salivate. But, while the skyrocketing IPOs of companies such as LinkedIn and Zillow have been welcome news to VCs, the 10-year performance for venture capital still remains pretty weak.

At least that’s the finding of a new study released this week by Cambridge Associates. For the 10-year period ended March 31, the report found that venture capitalists are still showing negative returns.

VC returns were -0.1 percent, which isn’t too bad except when you compare it to the private equity business which showed a gain of 10.8 percent for the same period. The public markets, including the Nasdaq, Dow Jones and S&P 500, also beat venture capitalists for that period.

That’s the bad news. Now, here’s the good news.

Things appear to be getting better. One year returns are up 18.5 percent in venture capital, beating most of the major stock indices. (Private equity still outperforms VC for that period). And the 10-year period, while important for those who allocate money to venture firms, is the only time frame when returns are in the negative.

Meanwhile, the all-important 10-year period is showing signs of improvement, heading towards positive territory. (Though who knows what the wild economic swings of this week will do. More on that in our story “Startups, IPOs and market volatity: How do you make sense of what’s going on?”).

Here’s what Cambridge Associates had to say about 10-year returns for venture capital.

The venture capital return for the period, while negative, was up sharply from the -2.0% return for the same length period ending December 31, 2010, and it was a full 4.5% improvement over the low point for the 10-year venture capital return, which was reached during the quarter ending September 30, 2010.

In other words, VCs are still losing money, but not quite as much. Here’s a deeper look at the research:

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