Venture capitalists suffer huge losses

After escaping serious damage in the early stages of the high-tech wreck, venture capitalists suffered even deeper financial wounds than stock market investors last year, according to industry figures released Monday.

Venture capital funds plunged by an average of 27.8 percent in 2001, a gruesome about-face from the prior year when the average fund gained 28.6 percent, according to statistics complied by Thomson Financial/Venture Economics for the National Venture Capital Association, an industry trade group.

It marked the industry's first calendar-year loss since the trade group began tracking fund returns in 1980. Before 2001, venture capitalists' worst single-year performance came in 1984 when the average fund inched up by 1.3 percent.

The venture capital community's setback was even more severe than the Nasdaq composite index, the most popular benchmark for measuring the performance of publicly held tech stocks. The Nasdaq index fell by 21 percent during 2001, coming off a 39 percent loss in 2000.