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No more IPOs or (lately) acquisitions, lots of funds failing to return principal, and yet those VCs still making money. Sounds like a broken model to me. Mayb
by rjurney 17y ago
No more IPOs or (lately) acquisitions, lots of funds failing to return principal, and yet those VCs still making money. Sounds like a broken model to me.
Maybe this does point to a broader problem? Isn't this the kind of shenanigans that led to the current downturn?
- pg 17y agoWhat evidence do you have that the current lack of IPOs is due to the fee structure of VCs? All the evidence I know of suggests otherwise. VCs had the same fee structure back when there were lots of IPOs.
- rjurney 17y agoThe lack of IPOs is not due to the fee structure of VCs. The incentive model however, continues to compensate them extremely well even though the LP's profit model is broken by SoX. Which would seem to mean that the system as a whole is broken, and that the VCs incentives are now a problem. This would seem to suggest that these incentives need to be reformed to fix the system. More likely though is that VC will simply crash like housing before any reform happens.