That was one of the symptoms of the dot-com bubble.

"He does not give any reason why he thinks this current trend is unsustainable"

Fred doesn't need to, because to him it's obvious: if people are making larger investments and thinking less about the investments they are making, they have a higher likelihood of throwing away money. If VCs invest poorly in their current fund, they will have trouble raising their next one and may even go out of business. Then there's less money in the ecosystem, fewer deals get done, fewer engineers can be employed, etc.

I don't know what his IRR is but he says "enjoyed an amazing run" which I am guessing means something north of 25%. That rate of return will not stay that high as more investors jump in who are willing to accept a lower return.

Hopefully we are coming up the "Slope of Enlightenment" this time: http://www.gartner.com/technology/research/methodologies/hyp...