Paul Kedrosky: Don't Blame Greedy VCs for Industry Bloat, Blame LPs
Paul Kedrosky, a senior economist with the Kauffman Foundation, is releasing a report on Wednesday titled “Right-Sizing the U.S. Venture Capital Industry." In it, he argues that to remain viable, the industry needs to shrink in line with the shrinking capital requirements and opportunities of the startups it funds. I talked tonight with Kedrosky about the paper (get it here) -- and why it’s relevant right now. Funds have long been accused of having grown too fat and dragging down returns as a result. Why write this paper now? Because we’ve finally reached a point when can happen. funds are at the end of their life span, 10-year returns are going to turn negative at the end of this year, and as they re-up, LPs have a choice to make.
10 June 2009•3 mins read
