| > In the article it says 80 percent of the investments fail No, the article claims that if 80% fail (but define failure: zero return? 1x?), the other 20% must return 30x in order for the fund as a whole to return 20%. Then it goes on to say that the average fund over 2 decades only broke even. This means that the successful 20% aren't returning the requisite 30x. > the entire point was to find something that returns in the hundreds of percents rather than 7%. Right, and if you don't find that something, the fund doesn't work. Funds aren't finding those somethings. >> A chastening study by the Ewing Marion Kauffman Foundation in 2012 found that the average venture-capital fund in the previous two decades, far from delivering its promised returns, had scarcely broken even. The paper cited is here: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2053258 VC are selling to LPs the same thing that VC-funded startups are selling to their employees. > I only worry about evil businesses getting this VC money And not about the other point they make in the article? : >> if your rivals are growing wildly at an early stage, and with good hookups, you’re obliged to play the game in order to keep up. VC is forcing companies that would otherwise be viable bootstrapped businesses, to fail. Then the VC-backed companies fail as well, and everyone is the poorer for it. |