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Returns at venture capital firms took a turn into negative territory during the third quarter of 2011 as the IPO market took a nosedive for the period ended September 30.  On the bright side, the losses at venture firms still outperformed the Nasdaq, Dow and S&P 500 for that period, according to a report from Cambridge Associates and the National Venture Capital Association.

Which way will VC returns head next? Photo: Bigstock

Meanwhile, 10-year returns continue to move into positive territory as venture capitalists leave the dot-com bust years behind. (See table above).

“In the third quarter, the volatile exit market had an impact on the quarterly and annual return numbers,” said Mark Heesen, president of NVCA. “However, the exit market did stabilize at the end of the year and we now have a record number of venture-backed companies in registration to go public. If these companies are able to successfully IPO in the near term and the acquirers continue to purchase our companies, we expect to see consistent and marked performance improvements across all time horizons in 2012.”

Previously on GeekWireTech IPOs start with a strong pop, and then promptly tank

[Photo via Bigstock]

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