Recommendation 1: Abolish VC Mandates: The allocations to VC that investment committees set and approve are a primary reason LPs keep investing in VC despite its persistent underperformance since the late 1990s. Returns data is very clear: it doesn’t make sense to invest in anything but a tiny group of ten or twenty top-performing VC funds. Fund of funds, which layer fees on top of underperformance, are rarely an effective solution. In the absence of access to top VC funds, institutional investors may need to accept that investing in small cap public equities is better for long-term investment returns than investing in second- or third-tier VC funds.

Kauffman isn't disagreeing with you, but is observing that LPs are often required to allocate capital into VC as an asset class, and can thus be required to plow money into huge and underperforming funds because it's too difficult to get enough money into the smaller funds that do outperform the market.

You can read just a couple pages into this report and see that they're on the same page you are in this regard, right?