It's not hard to differentiate between those who have true skill and those who got lucky, it's impossible. The variance is just too high. Hard implies that if y

It's not hard to differentiate between those who have true skill and those who got lucky, it's impossible. The variance is just too high. Hard implies that if you worked at it enough, you could somehow do it. You can't. And yes, venture funding is fundamentally flawed and the average VC firm underperforms the market. LPs as a whole would be better off with index funds. However, unlike with equities, you can get an edge in VC investing because results tend to perpetuate themselves. Remember, equities of non-public companies aren't priced by the market, so they aren't as efficient, and it's the efficiency of the market that makes beating it untenable. Also there's a tremendous deal of collusion in private equity that doesn't exist in public due to regulation. It's actually a mystery to me how they get away with much of what they do. The two types of investing aren't really comparable due to that. You could simply invest every year in the top few VC firms from the previous year and outperform the market for a long time that way. You cannot do this with hedge funds or mutual funds, or if you could, you and I would both not support the notion of just sticking it in ETFs.