Over the past five years venture capital-backed companies have outperformed other types of businesses.That’s according to a new report by Experian for the BVCA, which tracked the performance of a sample of companies backed by venture capital since 2006 and compared it with a benchmark sample of comparable companies based on size and sector. The report showed that:
- Venture capital-backed businesses showed stronger turnover growth between 2006 and 2010 than other enterprises, with VC-backed companies trebling sales compared with more modest growth at comparable companies. Profit growth was also stronger at VC-backed businesses.
- Job creation was also much stronger within VC-backed companies, with an 80 per cent rise in employment over the four year sample period. In comparison, other enterprises saw very little change in overall employment numbers.
- Overall, gross profit margin at VC-backed companies was broadly comparable with other enterprises. Turnover per employee – a proxy for productivity – was also broadly similar over the sample period as a whole.
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