NVCA Teaming Up with Cambridge Associates

Next Tuesday, for the first time, the National Venture Capital Association will be issuing a broad, first-quarter benchmark report including gross portfolio sector IRRs, thanks to a new agreement struck with Boston-based Cambridge Associates. NVCA members will have access to a more detailed (and free to them) report at the NVCA’s website, too. 

For those who might be wondering, the NVCA is also continuing its collaboration with PricewaterhouseCoopers, which — based on data from peHUB parent Thomson Reuters — issues quarterly VC investment activity reports that include info on startups that receive funding and the firms that provide it. The NVCA will also continue to publish quarterly exit and fundraising data in partnership with Thomson Reuters.
The several-year-long contract is smart move for the NVCA. Cambridge has a rich database of 1,271 U.S funds formed from 1981 through 2008. Indeed, most VC firms, before they head out to raise funds, ask Cambridge to verify the claims that they plan to make to potential investors. (Cambridge, which employs 950 people, will comb through a firm’s portfolio and also talk to it about team issues. The firms are not its clients, the firm has stressed to me. Rather, Cambridge, founded in 1973, gets paid by LPs who want to be knowledgeable about funds they’re considering backing, as well as want to gain competitive information on other funds.)

In December, the NVCA is also planning to introduce an online tool powered by Cambridge data, though it’s not revealing many details yet and the product won’t be priced for another few weeks, according to John Taylor, the organization’s VP of research. Asked if the arrangement will involve a revenue share, Taylor tells me that the terms are confidential, but that “because Cambridge has to be independent as it advises clients, it’s selling a bulk subscription to the NVCA, which can then sell the system to its members.”

Incidentally, the NVCA currently has 470 members, down from its peak of 490 members. “We’ve been surprised by how resilient our membership has been” in the face of a continuously shrinking industry, says Taylor.

At the same time, no one will be surprised if that changes dramatically, and soon. “A lot of firms are just now starting to wind down,” he says. “We think we’ll see a lot leaving over the next year or so.”

The new NVCA-Cambridge reports will focus exclusively on the U.S. venture capital market.