Benchmarking the returns to venture
By: Susan E. Woodward, Robert E. Hall.
Contributors: Hall, Robert Ernest, 1943-; National Bureau of Economic Research.
Series: NBER working paper series ;; working paper 10202; Working paper series (National Bureau of Economic Research : Online) ;; working paper no. 10202.
Publisher: National Bureau of Economic Research
Published: 2004
Place of publication: Cambridge, MA
Language: eng
Format: Electronic resource
Subjects: Venture capital.; Stocks -- Prices.
Description: "We describe a new index of the current and historical returns to venture-type capital.  The conceptual basis for the index is the value of a continuously reinvested value-weighted portfolio of all venture-backed and similar pre-public companies.  It provides a metric for private equity comparable to the S&P 500 for public equity.  We build the index from valuations revealed in episodic transactions in the companies' shares - private placements of new rounds of equity funding, IPOs, acquisitions, and liquidations.  Our approach to dealing with the episodic nature of the data is similar to the one used in constructing indexes of real-estate value from transaction data for individual properties.  We have extended earlier sources of data to deal with selection bias - we tracked down unfavorable valuations that were less likely to be reported in the earlier data.  We also use econometric techniques to handle the remaining selection bias.  The resulting index has important uses in marking venture portfolios to market and in assessing the performance of venture investments"--National Bureau of Economic Research web site.
Notes: Includes bibliographical references.
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