I spent $40 today to read the National Venture Capital Association’s annual Venture Capital Review. (To be clear, the document is free. It was the plane wifi that cost so much.) 

I’d be lying if I said it was the best $40 I’ve ever spent.

I’m sort of a venture dork, so I’ve always enjoyed research reports put out by the NVCA in the past, even if they are a bit too pro-industry. But the opening article of this one was just absurd. Penned by Ernst & Young, it argued that more venture-backed companies should aim for going public, because venture-backed companies have done so exceedingly well of late.

Wow! I wonder how we all had the impression that recent IPOs had been a disaster? Oh, because the biggest ones collapsed, and the NVCA is picking and choosing stats that suit its agenda. [UPDATE: The NVCA emphasizes that while they did commission and publish this report as its year in review for the industry, they do not actually endorse the content within the report. The article in question was written by Ernst & Young, not the NVCA.. E&Y paid to have it included in the report. In an email discussion, they declined to answer whether or not they agree with the article.]

The report says that the average one-day, post-IPO return of venture-backed companies between early 2007 and June 2012 was 18.8 percent — more than three times that of companies that didn’t accept venture capital, and that after six months these companies were still outperforming their rivals. It adds that in recently years, the one-year, post-IPO return of “a number” of venture-backed companies has exceeded 25 percent. A number! Well, that’s scientific!

It cites Fortinet, LinkedIn, and OpenTable as standouts, with one-year returns ranging from 105 percent to 150 percent.

Zero mention of Facebook, Groupon, Zynga, or Pandora — the four horsemen of the IPO-pocalypse. And in the chart, Facebook specifically is eliminated, because it might skew results.

Here’s why this annoys me: Whenever the NVCA puts out their quarterly updates on fundraising and returns, they are more than happy to include data points that skew the numbers, because then it’s skewing the numbers in an upward way. The quarter YouTube was acquired was suddenly one of the best since the bust! I wonder why? [UPDATE: I've also discussed this point with the NVCA since publication. My point here was that you can't leave in individual companies that skew results when it suits you, but take them out when they don't. The NVCA has taken issue with it, since they didn't write the report that took out Facebook's IPO results. If they consistently include all companies in all stats, I don't necessarily have an issue with them. But I maintain the NVCA shouldn't be putting its name on reports that include stats if they don't agree with them.]

I don’t mean to take anything away from the smaller IPOs that have done well, and LinkedIn. The press pays way too much attention to the top names and the top names only. But pretending that’s the whole story insults readers’ intelligence and kills the NVCA’s credibility on this issue. When those four companies alone have destroyed tens of billions of dollars in market cap since their opening debuts, they aren’t mere outliers. That’s real money people lost. You can’t pick overall percentages of gain when the biggest companies declined, and raw dollars returned when the biggest companies show gains.

It’s particularly galling because the reason Facebook, Groupon, and Zynga are considered “failures” is that they were priced horribly by private investors. The declines were a problem created by VCs who saw how much Google appreciated post-IPO and did aggressive late stage deals to lock in those gains before an IPO. The hope was the stock would pop modestly, and the investors and companies would get the benefits. But history has showed, they got it wrong.

The least the NVCA can do is acknowledge that happened.