Let's begin with our conclusion: Venture capital is not broken. It is thriving -- albeit in a smaller, more concentrated ecosystem of fund managers who are largely closed off to new investors.
In May, the Ewing Marion Kauffman Foundation - the world's largest foundation devoted to entrepreneurship - published a report entitled We Have Met the Enemy ... and He Is Us. It stated that the Foundation had a less than a positive experience investing in the asset class over the past twenty years. The report's damning review of the asset class caused quite a stir in the venture community by suggesting that investing in venture capital may not be a great idea.
I agree with several points made in the report. But over the past twelve of years of investing in the venture capital asset class, our experience at Greenspring Associates was profoundly different, suggesting that many of the Foundation's damning, broad-brushstroke proclamations were the result of an analysis of their own experiences. In that vacuum, they lead us not toward a more responsible industry, a more robust entrepreneurial ecosystem, or a more innovative economy.
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