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Comment by jordigg | Hacker News Reader

YC is doing the VC job by curating and selecting good bets. LPs can go straight to these deals and avoid the middlemen. How is that going to affect the traditional LP > VC > startup model? Will LPs go straight to "top" accelerators and invest directly on these startups?

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I didn’t think that identifying the good bets was what YC was wanting to do? Sam mentioned a couple of days ago that if YC was doing their job right the median long term valuation of all YC companies should be 0 (i.e. more than half should fail). Unless you are able to invest in all YC companies, then as "dumb money" you are very likely to end up investing only in the duds.

this is of course, assuming that VC money is any smarter than LP money. But is it really? Many LPs are successful business people or investors themselves. VCs are closer to the action and get better deal flow, but keeping deal flow constant, they are no better at picking stocks than my betta fish

The top VC funds seem to display alpha, but I agree the vast majority of general partners would be better replaced with a monkey and a dartboard.

Some already skip the VCs. But a good VC should not be brushed aside lightly - especially some with certain domain expertise. The best VC firms generate great returns fund after fund. Although, if you can't get into one of these prestigious funds, you might find it more advantageous to invest alongside them if possible, thus not investing in a lower tier fund.

Who are the best VC firms and what are their returns?

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