Venture funds are not actually sitting on cash. In order to optimize IRR, they do capital calls when they need money to invest instead of taking the money all u

Venture funds are not actually sitting on cash. In order to optimize IRR, they do capital calls when they need money to invest instead of taking the money all up front. The advantage is that they can calculate their rate of return based on the period of their investment rather than from the first day of the fund. The disadvantage is that during market upheaval (like the 2008 crises), there is a risk that limited partners (the investors in the funds) default on a capital call which can be a serious problem[1]. So no, VCs are not hoping for a crisis. [1] http://www.pepperlaw.com/publications/capital-call-defaults-can-have-severe-consequences-for-funds-2010-04-22/ http://www.pepperlaw.com/publications/capital-call-defaults-...