VCs need one large exit to see good profits
VC isn&#x27;t necessarily designed to have returns that are better than the public markets, only to have returns that are <i>different</i> from the public markets.  If you have billions of dollars to invest, you want to diversify.  So the core part of the message that VC is broken because most of them don&#x27;t beat the public markets doesn&#x27;t really matter.<p>&gt; One-two years for scouting and finding 10 A-round startups, four-five years for growth. Add some non-stop pressure on the founders to sell all the way around.<p>Holy moly.  How well would this have worked for Google to sell to Yahoo or Facebook to sell to Google?  You are throwing out the baby with the bathwater here.<p>If a company blows up, the vast majority of the returns are coming after 4-5 years.  I mean, look at GOOG, and <i>only</i> returns since it went public (~6 years after founding).  Google&#x27;s stock is up 1700%, the public markets are only up ~150%.  You want them to sell those returns to somebody else?  And obviously this post-IPO gain is just a multiplier on the returns from Series A --&gt; IPO which is just astronomical returns you&#x27;d be not getting.<p>&gt; Invest in more startups&#x2F;less cash in each.<p>Just doesn&#x27;t make sense.  For many VCs the limiting factor is their ability to spend their time and effort trying to help their portfolio companies.  Good VCs don&#x27;t just give money, they give guidance, advice, strategy, etc.  You can do this with 2-3 companies, not so much with 20-30.<p>&gt; The ancient “2 percent and 20 percent” should be killed off and replaced with something that endorses higher alignment. Let the VCs fight for their supper.<p>What is the suggestion?