Analyze This! An IRR Report Card for the Class of 1999-2000
- Topics:
- Innovation
- Tags:
- Finance,
- Recombinant Capital,
- IRR,
- IPO,
- Investor,
- Investment,
- Financing Startups,
- Financial Services,
- Financial Planning,
- Financial Accounting,
- ...
- Source:
- Recombinant Capital
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Overview: Venture capital firms are playing hard to get these days, claiming that they have learned their lessons from last year's devastating market losses. The article looks at the IRRs for group of companies that went public between the last quarter of 1999 and the last quarter of 2000. It selects eight representative companies from each of the four sectors that make up the IT industry – hardware, software, telecommunications, and Internet. After crunching the numbers for these 32 companies, it picked a pair of companies from each sector for further study and comparison. Each of the companies it examines has a post-money valuation at IPO of not less than $100 million. Venture capitalists use IRRs to benchmark their investments. Under normal economic conditions, venture funds generally aim to reap a 40 percent IRR on funds invested. The analysis of IRRs for early-stage investors clearly shows that most venture investors reaped better-than-average returns on these IPOs – even after the traumatic market downturn last April.
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Format: HTML | Date: Jan 2001 | Pages: 1
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