Mark Heesen, President, NVCA

ARLINGTON, VA – Exit markets have improved gradually but steadily in 2010, which is in evidence from the number of M&A deals we’ve seen and even a handful of IPOs slipping through open windows in a volatile market, boosting short-term venture capital performance in the first quarter 2010. But ten-year returns continue to decline. So says the Cambridge Associates U.S. Venture Capital Index, the National Venture Capital Association’s quarterly report on venture returns.

Mark Heesen, NVCA president said, “Top firms continue to perform well above the index but that band has narrowed over the last several years, fostering the Darwinian environment in which the venture industry is operating,” added Heesen. “We will need several quarters of healthy and viable IPOs and M&As to widen that pool of top performers and move returns back to the historical levels expected by our investors.”

The improving exit market helped limited partners in venture funds see some gains this year.

Peter Mooadian of Cambridge Associates said that if exit markets continue to improve, the decline in ten year returns should return to break-even or “modestly positive territory” by the second half of 2011.

For the full report see: National Venture Capital Association

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Tags: Cambridge Associates, Mark Heesen, NVCA, Q1 2010, venture returns