The high-risk, high-reward game of venture capital appears to be paying dividends again. After a long dry spell in which investors were better off putting money into public stocks, venture capitalists are now beating their public market compatriots.
Venture capital fund performance improved in nearly every time period for the quarter ended March 31, with the 1-, 5-, 10- and 20-year horizons all showing higher returns compared to the previous quarter. Venture capital also beat returns for the Dow Jones, Nasdaq and S&P 500 indices in the 1-, 3-, 10-, 15- and 20-year time horizons.
“For the second quarter in a row, venture capital outperformed the marquee benchmarks of Wall Street, suggesting strong future returns to limited partners that can be reinvested in the next generation of entrepreneurs,” said Bobby Franklin, President and CEO of NVCA, in a release. “This is the result of venture capitalists deploying capital to and mentoring high-growth companies that are disrupting the status quo and making strong exits through acquisition and going public.”
According to Renaissance Capital’s IPO Center, 176 companies have completed public offerings in the U.S. so far this year, up 55 percent over last year. The number of IPO filings is up 77 percent.
In the Seattle area, pet health insurance company Trupanion and biotechnology companies Alder Biopharmaceuticals and Immune Design recently completed IPOs.