> I find that despite the fact VCs outperform the market on average, the returns are driven by the top half of the predicted quality distribution. By dropping t

> I find that despite the fact VCs outperform the market on average, the returns are driven by the top half of the predicted quality distribution. By dropping the bottom half of investments and instead investing in the market, returns would have increased by 7 to 41 percentage points. This qualitative finding is robust to a set of outside options (stock market or bond market). Together the results suggest that there is significant room to improve how venture capitalists select into investments. Assuming the trained model is actually correct, this aligns with my view of VC - sharp investments, padded out with a bunch of crap because investing in VC has become a status symbol and the capital has to go somewhere.