Here are the VC numbers that were the subject of controversy when the Univ. of Texas decided to release them. Frankly, I don’t see what the big deal is. The funds started before 2000 have made money already, and the others haven’t. Given that there hasn’t been a favorable climate for IPOs since 1999, I don’t see this as proof of VC ineptitude, which isn’t to say that most VCs aren’t inept, just that this small slice doesn’t prove it.
Mercury News | 10/05/2002 | FINANCIAL RESULTS
FINANCIAL RESULTS
The University of Texas has released financial results of its investments in some Silicon Valley venture firms. However, the internal rate of return, or IRR, should not be compared across funds in their early stage (see footnote.)
| Fund manager | Year* | IRR |
| Advanced Technology Ventures | 2001 | -33.07% |
| Band of Angels | 2000 | -23.23% |
| Crescendo Ventures | 1997 | 25.33% |
| Foundation Capital | 2001 | -28.35% |
| Hellman & Friedman Investors | 1992 | 24.97% |
| Lighthouse Capital | 2001 | -13.89% |
| Morgenthaler Mgmt Partners | 1990 | 27.53% |
| Morgenthaler Mgmt Partners | 1998 | -7.04% |
| Morgenthaler MgmtPartners | 2000 | -24.01% |
| Morgenthaler Mgmt Partners | 2001 | -14.66% |
| Prospect Venture Partners | 2001 | -24.37% |
The Internal Rate of Return is the compounded annual rate of return since a fund’s inception. IRRs usually are negative for the first few years until start-ups begins to make money. IRRs take into account both actual money returned and the remaining value of the portfolio as estimated by venture firms. However, venture firms often differ in how and when they report data, so IRRs should not be compared across funds in early stages.
*Vintage year
Source: University of Texas Management Co.