The recent financial crisis cannot totally be blamed for the marked drops in venture capital fundraising, reduced venture investment and the hindrance of successful exits around the world, but it may have exacerbated the existing problems. Poor returns over the past decade indicate most fund managers do not earn their fees, and investors have been increasingly wary of taking on added risk without getting the reward. Structural changes are inevitable to the venture capital marketplace to preserve an essential source of funding for nascent high-growth companies.
--Cumming, Douglas J. and Johan, Sofia A., Is Venture Capital in Crisis? (June 11, 2012). World Economic Review, Forthcoming. Available at SSRN: http://ssrn.com/abstract=2082062
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