Atlantic Drift

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The importance of a vibrant venture capital industry in supporting growth is widely recognised, and consequently governments across the world have sought to promote the industry. But the development of the VC industry in the UK (and in many other countries) has been hampered by the low returns it delivers to its investors.

Understanding how the UK venture capital market compares to more successful ones, particularly the US market, is the first step towards improving the performance of the UK VC industry.

This report sheds further light on the magnitude of the performance gap between US and UK venture capital funds, its evolution over time, and what the likely drivers of the performance differences are. It uses a novel database that combines data on VC fund performance and their investments in the US and UK for 791 funds raised between 1990- 2005. Therefore, it not only reports differences in aggregate performance across countries, but in addition it compares like-for-like funds, with the same focus, vintage year and experience, but located on opposite shores of the Atlantic.

Published
June 2011

Authors
Josh Lerner, Yannis Pierrakis, Liam Collins and Albert Bravo Biosca