From Silicon Valley Watcher:
Marc Andreessen, Bill Maris, and John Doerr, are some of the smartest investors in tech, says Wired.
The National Venture Capital Association (NVCA) and Cambridge
Associates recently released a study showing that VC funds returned an
average of 7.4% annually over a ten year period. For early stage funding
it was just 6.4%. This compares to 8.5% for the S&P 500.
Foremski's Take: The VCs of Sand Hill Road have an
unshakeable belief in their investment skills, despite the study's Big
Data showing they can't outperform a grandmother investing in an S&P
Index fund.
It's easy to see how "smart money" VCs end up with dumb money
returns, when they herd into the same types of me-too startups and ruin
the market for each other; or force their portfolio companies to pivot
their business plans based on the trend du jour in their Twitter
streams.
Add to that, imposing toxic term sheets onto a startup's founders --
and it's no wonder they are increasingly despised in startup communities
on both coasts.
Random picks
The VCs are extraordinarily bad at picking winners. It might be
better to assign investments to a wide variety of startups on a lottery
basis....MUCH MORE, some of it quite harsh.
