Many smart venture capital observers have lamented the emergence of VC "megafunds," like those managed by my firm New Enterprise Associates. For example, the Kauffman Foundation recently issued a report claiming that "big VC funds fail to deliver big returns," while Silicon Valley Bank said that "small funds have a better performance profile than large funds."
Yet the trend over the past decade has been unmistakable: Even as new limited partner (LP) commitments to the overall VC market have contracted, LPs have concentrated ever more capital among fewer firms with larger funds. How can the LPs be so mistaken if the superiority of small funds is so obvious?
To read the original article: Does VC (fund size) matter? - The Term Sheet: Fortune's deals blog Term Sheet
