http://www.geekwire.com/2013/vc-returns-improve-10year-horiz...
This may sort itself out on its own, however, as LPs are investing less and less in the VC asset class.
For what it's worth, my impression has been that there is too much capital chasing too few funding-worthy startups and in recent years this has been driven in large part by monetary policy, which is producing capital misallocation and malinvestment across many asset classes.
I'd guess that when the game is over, angels and super angels will be especially affected and many will drop out of the market altogether. That, of course, would negatively impact AngelList.
- marginal VCs die sooner. This is already happening but more competition for deals hurts VCs who don't bring a lot to the table. This either brings in new smarter blood or right sizes the industry.
- can allow for a set of investors whose criteria for success is more in line with reality. A $100M exit doesn't get most VCs excited but angels and syndicates of angels prob love those. And 60% of tech M&A exits last year were less than $100M.(1)
(1) http://www.cbinsights.com/blog/acquisitions/tech-mergers-acq...
Sure, I could see an angel who put $50,000 into a $250,000 seed round for a company at a $2 million pre-money valuation being happy about a $100 million exit if said company never raises additional capital, but I'd be interested in knowing a) how typical this type of scenario is and b) what the overall returns are, on average, for angels actively making these kinds of investments.
That technicality aside, two points worth making: (1) VC funds are like startups. All of the money (that is made) investing in the winners, not the losers; and (2) The other side of the coin: VC is also like investing in hollywood Films and pro-sports franchises. People have an irrational desire 'to be in the game', and much value can be extracted through (what is best thought of as) dark externalities.
I love Naval and think AngelList will be a wild success (arguably it already is). But it's not a zero sum game. There is too much liquidity chasing too few venture partnerships and too much hope of being the one to invest in the next Google|Facebook|Twitter for AngelList to be destructively disruptive to venture investing.
Anyway, you can take a certain time frame, slice the start/end dates to match when certain companies sell or are the market is doing well and make your point look in either side's favor, especially for short time intervals like 1-3 years. Also curious as to how NVCA collects this data.
That said, it's the best of what's available today.
The best indicator or proxy that returns suck is that LPs are voting with their wallets and leaving the asset class and investing in it less.