Colin Barry

Highland Capital Partners (EF, Wednesday, Week 3)


Venture Capital is a strange game. The top quartile of funds earn excellent returns; the rest of the industry treads water at best. At the firm level, returns are extremely persistent over time.

It is unclear whether the VC model will be effective outside of Internet/Telecom/IT and biotech. And it took 20 years for the emergence of pharma giants to create a decent investment model for biotech VC.

As an asset class, VC offers mediocre returns and depends heavily on the state of the IPO market near the end of a fund's lifetime.