Y Combinator is moving up the funding chain with a fund raised for follow on funding rounds

Nasdaq is moving down the funding chain by acquiring a market for trading equity in pre-public companies.

Hedge fund and Private equity are starting to participate more in pre-public funding rounds.

Everyone is encroaching on the turf that used to belong solely to the Venture Capitalists.

I'm really not sure how to read this.

- is the market telling vc's they are doing a poor job?

- is the market getting a bit bubblish?

I think the day of vc's making 2 and 20 are coming to a close. Especially if they want to lock up your money for 7-10 years. I think the new pay paradigm for vc funds will be a flat management fee(much less than 2% per year) and stepped payouts ratio where the vc gets a gradually increasing percentage of profits up to their customary 20%.

As to the private equity markets, there are already markets hosted by the public markets for trading restricted shares of public companies. Restricted shares are shares issued by a company to do secondary raises(post IPO raise), usually granted with a warrant and below the current market value that can't be traded for a set period of time, usually 3-4 months.

This acquisition seems like a natural extension of those markets.