Venture capitalists still recovering from Bubble 1.0
While some of you sickos are rooting for Bubble 2.0, venture capital is just now getting over the last one. According to the National Venture Capital Association (PDF), five-year returns only turned positive again over this last quarter. The Financial Times turned the news into a pretty chart.
From the graph you can see that, though five-year returns (the thick broken line) are only now coming in positive, 20-year returns have consistently remained so. Which no doubt explains why large institutions are still pouring large amounts of cash into the sector.
Ten-year returns have steadily declined, the FT theorizes, due to the fact that, bubble or no, venture returns remain so consistent, that the demand to get into the market is outpacing the supply of startups.
In other words, yeah, there's more VC money out there than companies worth funding, so returns are sinking. It's news to make a bubble-watcher happy enough to kick a dog.