It depends what you mean by 'performance' - investment amount, financial return or non-financial effects on companies.

Their investment performance (ie how much cash they have raised and invested) is usually not that hard to track, as it is something they want the world to know about and so publicise it. Local trade associations and government business departments typically also collect this sort of data, so they can show graphs of how investment has risen (for some reason it never falls ....)

There are very few metrics on financial performance in any country, unfortunately. Databases like VentureSource are not complete, and if they report returns on funds it is usually as reported by the general partner company, and not independently audited. Thus some funds report the sum of exit values when calculating returns, without taking off carried interest, management fees etc.. Valuation of non-exited companies is fraught with problems. The industry standard is to value a company at the price of its last investment round unless something material has happened to change that price. However if I, as Series A investor, am holding shares in Company XX, and a Series B investor has just come in with shares at (say) $10 each, the one thing I can be sure of is that my shares are not worth $10 each because of pref class, anti-dilution and other share structure effects.

Thus even in territories that require disclosure of financials, working out what a VC fund is actually worth, and hence what the performance of the general partner has been, is quite difficult. In territories which do not require disclosure, it is a lot harder. In reality, the only way is to get the VC to allow you to audit their books, and only current or future limited partners would be allowed to do that. (Not even the tax man, as many funds, in Europe anyway, are run through off-shore corporations.)

Non-financial performance can be easier to track, ironically. VC often claims to create and build companies. You can look at what companies they have invested in (through press releases, local newspaper stories and so on), and see i) whether they were actually created by VC or whether VC came in when the company was well established, and ii) what happened to them after VC came in. My recent survey of US/EU biotechnology VC, for example, showed that since 2008 almost none have actually invested in start-up companies, despite what their web sites say. But gathering this type of data needs lots of work, and there is no reliable, central source that I can recommend.

Thanks, William.

Denis,

When you lack publicly available data, and as William mentioned above the gathering is challenging if not titanic... I would go for a qualitative analysis rather than quantitative, looking at one particular VC fund preferably one, which would belong to a group so as to keep open the opportunity to extend the research scope once you would have made internal (within the VC fund) connections.

Marion, thanks for your answer. Qualitative may be an answer for some specific cases, and building theory from these are much more controversial in Finance, as you shall be aware.The main concern is to have comparable data, and time series, which are a real challenge in this topic...

Dear Denis,

I agree on the difficulty to built theories in Finance based on qualitative methods.

I face similar challenges as you with my topic, which is related to financial support for SMEs and I have been looking in the direction of other related fields like management. Thus perhaps these resources on theory building published by the Academy of Management might be of assistance with your researches: http://aom.org/Publications/AMR/Theory-Building-Resources.aspx

I also like this article from Mahoney approaching quali versus quanti research: Mahoney, J. (2006). A Tale of Two Cultures: Contrasting Quantitative and Qualitative Research. Political Analysis, 14(3), 227–249. doi:10.1093/pan/mpj017

If you could share some of your references in top Finance journals I would be pleased to read them.

Br.

Dear Marion, thanks for your valuable contribution. In fact, I have researchs in SMEs too, and I am obviously facing these same problems. One of my papers is about to be published and I will let you know. But I used one of the largest database of Latin America, from Serasa-experian, using more than 10,000 companies in Sao Paulo/Brazil in order to check the usual determinants, capital structure theory and speed adjustment. Among my researchs, Financial Behavior, SMEs and VC/PE are the main topics, so I have to deal with the ambiguity of lack of data, academic bias with qualitative in finance and other usual research problems that you must be aware.

Thanks agains.

Hi,

Perhaps this paper will be of some help to you:

R Braun, T Jenkison, I Stoff, "How persistent is private equity performance? Evidence from deal-level data", Journal of Financial Economics, 2016 forthcoming.

Best regards.

The annual reports of development finance institutions (DFIs) may have some general data on investee company performance at a portfolio level. Contacting the institutions's investment officers may provide more detailed performance data at the investee company level. Also, search Microfinance Funds and Impact Investment Funds , e.g., BlueOrchard (Zurich).

Examples of DFIs: International Finance Corp (part of World Bank Family), CDC Group (London-UK DFI), USAID, etc.

hope this helps...ry