Dow Jones Launches Venture Capital Index

Dow Jones announced the launch of a new index designed to track changes in the market value of companies that are backed by U.S. venture capital firms.

The Dow Jones U.S. Venture Capital Index, which will publish data about an asset class that has not historically been available to the general public, is based on information from domestic firms that have received equity funding solely from angel investors, affluent private investors, or leveraged buyout firms, the company said.

The index will also be based on data from the Dow Jones VentureSource platform, which covers more than 14,000 private investment firms and over 48,000 venture-backed companies in all industries and stages of development, Dow Jones added.

The methodology for the new index was developed between Dow Jones Indexes and Sand Hill Econometrics, which had previously designed methods for estimating a company’s value when a recent market value is not available, Dow Jones said.

“Even when we began building a venture index in 2001, I knew it was important to collaborate with a big-name index provider and to use a source with high-quality data,” Susan Woodward, an economist and founder of Sand Hill Econometrics said in a statement. “It’s a great time to launch. We look forward to coming out with additional indexes built from this data.”

Dow Jones said the new index will calculate values in U.S. dollars and will be published quarterly, since funding events are usually reported at the end of calendar quarters. Index values for April, May, and June of this year are scheduled to be published in the middle of November, Dow Jones noted.

“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,” Michael Petronella, the president of Dow Jones Indexes said in a statement.

As the Senior Editor of Advanced Trading, Justin Grant plays a key role in steering the magazine's coverage of the latest issues affecting the buy-side trading community. Since joining Advanced Trading in 2010, Grant's news analysis has touched on everything from the latest ... View Full Bio