Economics
VCs Don't Want Your Money Anymore
With coffers bulging and scant prospects for the quick returns that characterized the boom years, they're returning clients' investments
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Venture capitalists have a problem that most anyone would envy: too much money. During the boom times, VC funds, which finance startup companies, reaped staggering profits, and an embarrassment of riches from grateful investors.
What a difference a bear market makes. Now, most VC funds are underwater and quality investment pickings are slim. Foundations, pension funds, and endowments--the limited partners, or clients, of VC funds--are getting really edgy. What's more, nobody is in the mood to tie up money for the five years or more it takes typically for a high-risk venture to bear fruit.