Returns to venture capital

In a working paper, Susan Woodward and Bob Hall track the division of value for a sample of U.S. venture-funded companies from 1987 through 2005.

Entrepreneurs earned an average of $9 million from each company that succeeded in attracting venture funding....

Venture capitalists received an average of $5 million in fee revenue from each company they backed. The outside investors in venture capital received a financial return substantially above that of publicly traded companies, but that the excess is mostly a reward for bearing risk.