2. Your assumption that the IPO market will be closed for the foreseeable future is one I have no way to validate or refute until time passes.  Furthermore – I’ve never depended on an IPO market for my investing success ever since I started investing in 1994.  Sure – IPOs have certainly contributed, but I’ve actually been very successful with M&A outcomes (and in many cases prefer them.)  I definitely do not agree that “No IPO market = No VC market.”  Whether the VC market should be smaller (or larger) is something that will resolve itself independent of any of our viewpoints.

1) If you consider all your entire funds gains AND losses or look at the VC space as a whole, does VC beat the market over the last 10 and 20 years AND provide a return that would be acceptable for the risk (i.e. > 7 or 8%)? I think you will find that it doesn't.

2) Since the IPO market has been closed for most of this decade and will continue to be closed for the forseeable future I don't expect VC to thrive in this environment.

Wouldn't you agree that No IPO market = No VC market or at least a much much smaller one?

Your assumption that acquisitions don’t really pay all that well is incorrect. On a cash on cash multiple, I can point to a number of acquisitions I’ve participated in since 2000 that returned 10x or more, including one that has returned over 50x at this point.

But yes, I agree with the assertion that “my job as a VC is to provide higher returns to my investors for higher risk.”   I thought I said this in my post where I said “My “job” – in its most crass form – is simple – take a box of money and turn it into a much bigger box of money” but I guess I wasn’t explicit enough.

That IS your job as a VC to provide higher returns to your investors for higher risk. It is not to feel good about what you do every day, no one cares about that. I mean institutional money is great cause its dumb and never asks any questions, but at the end of the day all that matters is are you beating the market and providing your investors with a return that commensurates with a higher level of risk?

but whats wrong with working hard? whats wrong with your partner and you profiting from your hard work? whats wrong with both parties paying a collective penalty for failing? (alot actually!)

what always amuses me is when entrepreneurs take the attitude like you do in hard times. do you think for a moment that a VC in any way benefits from layoffs, bad management and foolish spending? his work on the company likely triples, his value probably halves, and his friction increases.

Force layoffs at one of your "Angel Investments" due to a horrible business plan and foolish spending by the executives? Of course, it's just good business.

VCs don't create anything but the opportunity for other people to work hard, (as long as the VC has a very good chance of profiting handsomely and excessively from the hard work of others).

ps. We've never met. @brjackson introduced me to your blog. I've learned a lot from poking around your archives, and love the nuggets of wisdom littered throughout.