Venture LPs Stay Away in Droves

Q: What is the difference between the top 5 venture funds and ATR (all the rest)? A: “That’s where the money is.” Actually, the quote is attributed to Willie Sutton, a prolific bank robber during the 20’s and 30’s, but it somehow seemed appropriate here. During the first quarter, the top 5 raised 57% of all VC capital; ATR came up a bit short. Joanna Glasner in Reuter’s Venture Capital Journal reports that the most popular answer (39%) from institutional limited partners when asked “Which sector of VC do you find exciting?” was “I don’t invest in venture.” Read Joanna’s post on PEhub. OK, so we know that LPs are not investing in funds.  But do we know WHY they are not investing?  My personal opinion is that they have learned the hard way that too many entrepreneurs consider failure a viable option. I personally learned that lesson really well!  Never again.  (But perhaps that’s only me being whiny.) What’s your opinion? — Steve Hogan, Tech-Rx