THE PARTNERS at New Enterprise Associates, Baltimore's storied $6 billion venture-capital firm, are probably not thrilled that this column will disclose their confidential results from two decades of investing in health care and technology startups.
But they seem to understand that times change and that light will pierce the exclusive venture-capital club whether venture capitalists like it or not.
It's hard to hide $6 billion. Venture capital, which mints companies from dreams and ignited the technology boom of the 1990s, has become too big, too lucrative and too dependent on government pension money to operate in the shadows.
The outing of venture capital started in 2001, when the San Jose Mercury News began asking the California Public Employees' Retirement System for details about its venture-capital bets.
And why not? CalPERS had sunk billions into business startups. It managed pension and health care money for 1.4 million public employees and retirees. It held detailed reports on the high-risk, high-return venture investments. And it was subject to the California Public Records Act.
CalPERS refused, the Mercury News sued, and the result was a settlement that pried the lid off secret venture-capital data.
Last year CalPERS revealed its contributions, cash flows and returns for all venture investments and other "private equity" deals, which involve nonpublicly traded stock.
Other funds followed, unlocking a mine of data for journalists and prospectors such as Mark O'Hare.
Based in London, O'Hare has peppered hundreds of state and city pension pools with requests for venture-capital data, which he sells to investors through his company, Private Equity Intelligence.
Maryland's State Retirement and Pension System hears from O'Hare "all the time," says system spokesman Joseph M. Coale. It has sent him data on Maryland's small investments in what are essentially private-equity mutual funds.
All of this has unnerved venture-capital pros who are accustomed to nurturing fragile corporate embryos away from the prying eyes of competitors and voyeurs.
"We don't like to see our data in the general press," says Frank Adams, founder of Grotech Capital Group, a $1 billion Baltimore venture firm.
Why not? Revelation of trouble might drive away a startup's customers, Adams said. News of success might breed competitors. Venture pros might be prosecuted for disclosing insider information. Regulators might accuse a venture firm of pitching its services to unsophisticated investors.
And - this one Adams didn't mention - venture firms' often-fabulous returns might be revealed to outside gawkers. I was unable to get information on Grotech's track record. Grotech's public-pension partners, Adams said, "have taken a very strong position against disclosing data."
But O'Hare gave me results he has compiled for New Enterprise, and they are very impressive indeed.
"They're one of our stars," O'Hare says. "Some of their funds have just done amazingly well."
New Enterprise has floated 10 venture partnerships since 1980. Two, NEA VI, launched in 1993, and NEA VII, started in 1996, produced compound annual "internal rates of return," the standard yardstick, of 65 percent through March 31 of last year.
In a business where a great return is 30 percent, 65 percent is stupendous. I don't know which startups fueled NEA VI and NEA VII, but it's fair to assume they included such well-known New Enterprise winners as Juniper Networks, Healtheon and Xros.
NEA VI started with $230 million, had paid out $783 million to its investors by last spring and still wasn't finished. NEA VII started with $311 million and had remitted most of that back to partners by last spring. A typical venture partnership lasts 10 years or so.
NEA VIII has produced an internal rate of return of 43 percent since 1998. NEA V, dating from 1990, generated 31 percent.
New Enterprise funds from the 1980s did far less well. The best was NEA IV, started in 1986, which returned 13 percent a year. Partnerships of more recent vintage show losses, but that's typical for green venture bets.
Nancy Dorman, administrative general partner for New Enterprise, says it was "inevitable and appropriate" for public pension funds to disclose the figures cited here. New Enterprise has granted permission to government partners to reveal this information, she says, and the firm won't kick out such investors the way venture firm Sequoia Capital has.
But venture jockeys worry that the snoopers won't be satisfied with rates of return and cash flows and will dig deeper for sensitive data on individual startup companies.
"Any and all information relating to our portfolio companies must remain absolutely confidential," Dorman says.
Says Grotech's Adams: "It's the old nose-under-the-tent theory. If the confidential agreements get broken for [internal rates of return], where does it stop?"
I don't know where it stops. But the sunshine winking down on the venture-capital trade seems to be a healthy sign of a maturing capital market. Much of today's routine financial disclosures by, say, General Motors were once secret, too.
Now excuse me while I go file a few Freedom of Information requests with my pension-fund friends.
Several public pension funds have posted results from venture capital and other "private equity" investments online. They include:
The University of California: www.ucop.edu/treasurer/updates/PE%20irr.pdf
California Public Employees' Retirement System: www.calpers.ca.gov/invest/aim/aim.asp
California State Teachers' Retirement System: www.calstrs.com/investments/privequityperformance.pdf