The State and Structure of U.S. Venture Capital Performance
This paper examines the structural change of U.S. venture capitals in this decade, from the point of their investment and fund performance. By using data of individual venture capital funds, it is found that high performance of U.S. venture capital funds is limited to the late 1990s and their low performance continues after the Internet bubble. The major findings are: (1) the gap between high performance funds and other funds is historically large; (2) top-performing venture capital firms continue to gain high fund performance; and (3) high performance of the funds is mainly attributed to great successful IPOs of few specific portfolio companies. The recent low performance reflects the IPO crunch in the U.S. stock market, and the venture capitals try to find their opportunity in emerging countries and new industries.