[sethg]

You can usually get a 10% annual return by investing in regular stocks. The kind of investors who put their money in VC firms are looking for higher returns.

Let’s say I invest a million bucks in my local VC fund, and its investments earn back an annualized 15%/year over ten years. My million bucks has turned in to a little over four million. After paying the fees, I would still be about a million dollars ahead of someone who got a 10% return from a regular mutual fund.