Eagle Summit Corp has reviewed a report stating that the estimated market value of venture capital-financed companies in the U.S. rose 19% in 2010's fourth quarter and 23% for 2010. The rise marks the second consecutive year in which valuations of, and the amounts invested in, venture capital-financed companies posted gains over to previous years.
Venture capitalists invested $28.5 billion in 2,874 deals in 2010, an increase of 17% in dollars and 8% in deals compared with 2009. For 2010's fourth quarter, investments totaled $9.0 billion in 785 deals, a 20% increase in dollars and no change in deals from the fourth quarter of 2009 when $7.2 billion went into 785 deals, according to the report viewed by Eagle Summit Corp.
Anyone who thinks the rise in valuations of venture capital-funded companies in 2010's fourth quarter was dominated by a handful of companies would be mistaken. There were 785 private rounds of funding in the fourth quarter with an average amount of $11.5 million raised, well above the third quarter's $9.0 million. These latest figures validate the notion that valuations of venture capital- funded companies for 2010's fourth quarter were up significantly.
The report tracks the value of companies headquartered in the U.S. that have received equity funding from institutional venture capital funds. Values are reported by the companies themselves. Excluded from the index are companies that receive funding solely from angels, affluent private investors, or leveraged buyout funds. Component companies enter the index when they get a first round of venture funding. They exit the report when they are acquired, merge with another company, make an IPO or go out of business. The index is market-value weighted, continuously invested, and updated quarterly.
As of December 31, 2010, there were about 8,000 active companies studied in the report. The report has seen an annualized return of 16.4% from the end of 1991 through the present, before expenses and fees. The report is calculated in U.S. dollars, because funding events are usually reported at the end of calendar quarters, on a one-quarter delayed basis.
About Eagle Summit Corporation
Founded in 2005 and based in Cyprus, the goal at Eagle Summit Corp (eaglesummitcorp.com) is a simple one: to work with talented entrepreneurs and management teams to develop ground-breaking products and build substantial business enterprises around them. We have raised a series of partnerships, with current committed capital in excess of $450 million, and helped build hundreds of companies, 60 of which have gone on to successful IPOs and more than 45 of which have gone on to successful mergers.