RT Journal Article
SR Electronic
T1 Concentration in the Venture Capital Industry
JF The Journal of Private Equity
FD Institutional Investor Journals
SP 7
OP 13
DO 10.3905/jpe.2000.319966
VO 3
IS 3
A1 David J. BenDaniel
A1 Jesse E. Reyes
A1 Michael R. D'Angelo
YR 2000
UL https://pm-research.com/content/3/3/7.abstract
AB This article examines historical data characterizing the U.S. venture capital industry from 1961 to the present. It shows that concentration has existed in the industry for at least a decade, and this concentration continues to grow and become more pronounced. Capital is raised by an elite few of the venture capital firms currently in operation. This group of very large venture capital firms has consistently shown an IRR exceeding that of the rest of the industry. In general, these larger firms tend to focus on later stage deals. In what might be characterized as a disequilibrium, venture capital IRRs in later stage deals have been higher than those captured by early stage deals. Factors maintaining this disequilibrium are discussed along with the potential industry implications associated with concentration.