I have no idea what A16Z's returns for their LPs are across their funds, but this could literally be right out of a movie script.

  **SCENE**
  
  GENERAL PARTNER is chatting with potential LIMITED PARTNER
  over cocktails.

  LP: The fund you're raising... the thesis, it's...
      interesting. You've done a great job with your last
      three funds. But I've read similar things from
      Andreessen's team that make me think they have a
      better grasp of the space - wouldn't my money be
      better invested with them?

  GP smirks and calmly reaches towards MARTINI GLASS,
  casually picking the toothpick, olive still attached,
  between her thumb and index fingers. She places the olive
  between her teeth to the side of her mouth, grasps, and 
  pulls the olive off the toothpick in one swift motion.
  She carefully places the toothpick in a napkin, stares LP
  in the eye, and pauses just a moment before aggressively
  biting down. She finishes chewing without breaking eye
  contact.

  GP: Ah. Yes, they do market themselves as visionaries.
      It's completely intentional. They're fantastic at
      marketing, PR, and brand building. In less than a
      decade, while generating very unimpressive returns,
      they've built one of the strongest VC brands in the
      world. They're phenomenal at it. They do it so well
      that they make it look easy, but it's not at all.

  LP: So if I'd like to make money...

  GP: You got it. How much are you in for?

One of the most prominent managers local to me (worth $150-200m, probably one of the wealthiest people in my country) only has one senior manager, apart from that...just grads. The product is terrible but is designed for a certain market that is growing rapidly and is naturally doing very very well. This is true of all of the largest fund managers local to me: always distribution first, thinking about who is going to buy, and what they care about (i.e. US pension fund, superannuation, etc.).

Even worse, I have come across more than one manager who was clearly very +EV but either couldn't raise money or went out of business because they weren't selling the right product at the right time. Most good managers do stay in business but not all. And if you don't have good distribution, you won't survive no matter what returns you have.

Why? My current theory is that people have rigid ideas about how to make money. Profit doesn't matter: it is about validating an idea or opinion of themselves. I suspect that the VC world is no different. I know nothing about a16z apart from their "reputation": very influential, whizzy VC firm, and very safe intellectually. They are the archetype VC firm, this is what VC investing is, you can lose money but you won't lose face.