> Venture as an asset class has underperformed the S&P over the last 10 years[1], so you probably aren't missing out on much.

And that's actually biasing the comparison in VC's favor.

The S&P 500 is a large-cap index. Venture capital is supposed to invest in early-stage companies with high growth prospects. A fairer comparison would be to a small-cap index, or to private equity, or to private equity that only takes on small-caps.

Also note that venture capital is risky and illiquid. It should earn a risk and liquidity premium vs. the public stock market. If it can't earn at least this premium, then it would be producing negative alpha.

Can you provide a link to this data, please?

I recall from my venture class in B-school that most venture funds basically match inflation. Sorry, I don't have a link to cite, but our prof had been a venture capitalist for 15 years. For every $100M return KPCB sees off of a Facebook or similar, they pump $90M into companies that either fail outright or exit in a break-even acquihire. $10M over the average 10 year life of a venture fund isn't a great return.

Most good VCs aren't in it for the money; they want to see people succeed. The money is obviously important, but they generally have enough of it before they start investing.