[vidarh]

LPs in a VC fund know very well what the fund is incentivised to deliver. I worked for one, and our LPs would aggressively write low performers down to zero. It didn't matter to them either. Obviously wouldn't turn it down if still possible once all else has failed, but retaining even a fraction of a percent shot at a higher return was what mattered most, even knowing it was extremely unlikely.

Investors in these funds are diversified - they invest in VCs to take the high risk bets. They invest elsewhere for the steadier, lower risk returns.