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A comment on The venture capital model is broken, and this damning report explains why. Parent comment

Re:The venture capital model is broken, and this damning rep... by tlogan on Monday May 07, 2012 @04:23PM (#3940806)
I think the point of the report is that system as now does not force "lame" firms to improve.

In other words, top VC funds will be top VC funds - the improving rules will not influence them. The question is: Is there a better system to force bad VCs to improve (or to make them bankrupt faster so they can be replaced with better ones)?

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Re:The venture capital model is broken, and this damning rep... by rscale on Monday May 07, 2012 @04:55PM (#3940933)
The report also cites Landmark's simulated auction of carried interest, which showed that they might be able to collect 42.5% carried interest if they actually implemented such an innovation. That'd be wonderful for Landmark, and democratizing as well, since it'd shift investment in oversubscribed, top-tier funds away from cozy relationships, and towards those who value that investment most highly.

As such, this really isn't a report saying 'VCs make too much money', but rather that standard LP/VC terms overcompensate poor VCs and undercompensate top-tier VCs, and that this is unlikely to change unless LPs change their behavior en masse. There were numerous examples of GPs who were open to innovations in the VC/LP relationship, but didn't pursue them because of intransigent LPs.

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