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In 2001, our founders, with their collective experience in academia, investment banking, the federal government, private early-stage companies, and as private investors themselves, recognized the need for a change. They wanted to address the challenges faced by venture capital investors who lacked the tools and benchmarks needed to evaluate the performance of their holdings, and were convinced that just as public market investing could be measured against such indices as the S&P 500 or the DJ Wilshire 5000, private investing ought to have a similar benchmark by which it can be measured.
Taking the first step toward a true performance benchmark for all classes of private equity, Sand Hill Econometrics set forth over the next two years to create its metrics for evaluating venture capital performance. The result is the Sand Hill Index of Venture and a set of analytical tools based on a combination of Nobel Prize-winning bias correction techniques and cutting edge statistical methods.
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