Those who invest money in venture capital are shrewder and more patient than your average schmoe, right? They buy when others are selling and sell when others are buying?
In fact, as these charts show, those who invest money with venture capital firms are as subject to moods, fads, and recent returns as the fickle folks in the public market herd. They pour money into VC funds at market tops and get conservative at market bottoms. Just like regular stock investors!
Venture capital funds raised $4.3 billion in the first quarter of 2009, says Thomson Reuters. That was spread among 40 funds, which is one the smallest amounts raised since Q3 2003. Another couple of quarters of lousy returns, and VC fundraising should drop to zero again. Which will be an excellent time to make a killing!
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