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Is Venture Capital Broken?

Harvard Business Review

The report, provocatively titled "We Have Met the Enemy and He is Us" [ PDF ], summarizes its findings thus: Limited Partners — foundations, endowments, and state pension funds — invest too much capital in underperforming venture capital funds on frequently misaligned terms. Maybe that's just the way it is.

article thumbnail

Is Venture Capital Broken?

Harvard Business Review

The report, provocatively titled "We Have Met the Enemy and He is Us" [ PDF ], summarizes its findings thus: Limited Partners — foundations, endowments, and state pension funds — invest too much capital in underperforming venture capital funds on frequently misaligned terms. Maybe that's just the way it is.

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The Get-Big-Quick Fallacy

Harvard Business Review

Research by Harvard Business School senior lecturer Shikhar Ghosh, in fact, has found that fully 75% of venture capital-backed startups — presumably the crème de la crème of the startup world — failed to return the capital invested in them to their investors (let alone generate positive returns).

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The Disruption of Venture Capital

Harvard Business Review

An organization's capabilities become its disabilities when disruption is afoot." – Clayton Christensen, The Innovator's Solution. In November 2005, Paul Graham wrote an essay titled " The Venture Capital Squeeze." Over the years, venture capitalists have been some of the most ardent students of disruptive innovation.