Historical VC Returns

Taking into account all gains and losses, the venture capital industry has historically performed exceptionally well for those investors fortunate enough to participate. As reported by Thompson Venture Economics, the average 10 year compounded return for all venture capital investments was an impressive 21.0%. Consistent with the general rule that the earlier you invest in a successful company the greater your return will be, early stage investments averaged an even more impressive 40.0% return over the same period. Markpoint has historically focused its investments on early stage companies.

Many of today's largest, most well established companies were once the early benefactors of venture capital financing: Ciena, Cisco, eBay, Federal Express, Intel, Sun Microsystems, etc. Early investors in these companies and many others like them have reaped tremendous financial rewards from their early stage investments. As reported in the Wall Street Journal, a venture capital stage investment of just $100,000 in Ciena was valued at over $280 million less than five years later. However, for every Ciena, there are several companies that fail to execute their business plans resulting in significant or complete investment loss for their early stage backers.

Investors must realize that venture capital investing involves a high degree of risk and requires time, patience and an adequate degree of diversification. Portfolio investments generally require a minimum of three to five years to mature and are illiquid during this time. Although the relative risk for this asset class is certainly higher, the superior long-term return performance can significantly increase the value of your investment portfolio.