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Dow Jones launches Dow Jones U.S. Venture Capital index
By Melissa Kory
Cleveland, Oct. 28 - Dow Jones Indexes announced the launch of the Dow Jones U.S. Venture Capital index, designed to measure changes in the market value of venture capital-financed companies.
The index has been licensed to Chicago Alternative Investment Partners, LLC to serve as a basis for financial products.
"This index tracks an asset class that has not been readily available before to the general public," Michael A. Petronella, president of Dow Jones Indexes, said in a news release. "By publishing this index, we intend to shed light on this dynamic market and offer investors access to information in this important segment of U.S. economic growth."
The methodology for the index was developed by Dow Jones Indexes and Sand Hill Econometrics. The values are based on a combination of values reported to Dow Jones VentureSource and value estimates based on Sand Hill's previously developed econometric methods for estimating company values when a recent market value is not readily available.
The index is based on Dow Jones VentureSource's data about companies that have received equity funding from institutional venture capital funds. Excluded from the index are companies that receive funding solely from "angels," affluent private investors or leveraged buyout funds.
As of March 31, 2010, there were more than 7,000 components in the index. Component companies enter the index when they get a first round of venture funding. They are removed when they are acquired, merge with another company, make an initial public offering or go out of business.
The index is market-value weighted, reviewed quarterly, calculated in U.S. dollars and will be published quarterly. It was first published on March 31, 2010. Estimated monthly back-tested history is available back to Dec. 31, 1991.
At the end of the first quarter of 2010, the index value was 1,605.98.
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