The real issue is that VC was over-capitalized in 1999-2000. More capital chasing the same investments bids up valuations and increases copycat competition, whi

The real issue is that VC was over-capitalized in 1999-2000. More capital chasing the same investments bids up valuations and increases copycat competition, which both lower returns. It takes a looong time to rebalance the supply of capital since PE/VC funds typically raise their next fund before the results of their current fund are realized. So the venture landscape was likely overcapitalized from 1999-2005, if not longer. Has the balance come back or do we again have too much money chasing too few great companies? Given the choice, I prefer to have more capital in the system. More funding for entrepreneurs.