Does Venture Capital Pay? New Evidence on an Old Question

Journal of Corporate Accounting and Finance, 26(5), July-August 2015, pp.93-98

12 Pages Posted: 17 Jun 2015

Date Written: June 16, 2015

Abstract

Using a novel set of risk benchmarks we analyze the performance of U.S. venture capital and find that, over the long term, venture capitalists have achieved a risk-adjusted return of 5.16%. In stark contrast, their passive capital providers have pocketed a dismal, close-to-nil return on venture capital. We suggest a method to solve the imbalance — namely, a practical way for passive investors to negotiate a fairer split of returns with venture capitalists.

Keywords: asset pricing, venture capital, private equity

JEL Classification: G24

Suggested Citation

Pereiro, Luis E., Does Venture Capital Pay? New Evidence on an Old Question (June 16, 2015). Journal of Corporate Accounting and Finance, 26(5), July-August 2015, pp.93-98, Available at SSRN: https://ssrn.com/abstract=2619160 or http://dx.doi.org/10.2139/ssrn.2619160

Luis E. Pereiro (Contact Author)

Universidad Torcuato Di Tella ( email )

Saenz Valiente 1010
C1428BIJ Buenos Aires, 1428BIJ
Argentina
541151697301 (Phone)
541151697347 (Fax)

HOME PAGE: http://www.utdt.edu

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