In “VCs aren’t [the] only ones able to show you the money” John Shinal, USA Today’s New Tech Economy columnist, reported that US venture-capital (VC) investment in 2012 fell to $29.7 bil­lion from $35.1 billion in 2011. Three years after the financial collapse, VC-backed investments haven’t returned to pre-great-recession levels.

In itself, this is not surprising. Some signs of recovery notwithstanding, little has returned to pre-recession levels in the US economy. The more-troubling news, though, is that the number of acquisitions of VC-backed companies declined by a whopping 21% last year. As Mr. Shinal ob­served, this is the second-lowest total in the past seven years, exceeding the lowest (in 2009) by only six deals. That cannot be attributed to the effects of the financial crisis alone.

Most readers are probably raising their eyebrows right now. Didn’t VC-backed Facebook go public last year in the largest IPO in US history? But Facebook was the exception. The most-dismal news for VCs is that the average internal rate of return for US VC funds over the past ten years strained to reach a dreary 6.1%. In comparison, the Nasdaq rose 10.3% and the Dow Jones, 8.6%. True, a lot of the rise happened in the last three years only as the stock market took off, but one would still expect the masters of the universe to beat stodgy old public corpora­tions!

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