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Comment by Punoxysm | Hacker News Reader

VCs deal in illiquid, information-asymmetric markets where prices are directly negotiated, capital is locked up for an extended period, and deals are large enough that investment is forced to be "lumpy".

If you could somehow invest in a startup "index", it would be great, but there really is no such thing (especially not for the VCs).

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If you read section #1 in the article, you'll note that there are a lot of bad picks out there. To review:

  - 4,000 startups a year. 
  - 3,000 seen by a16z.
  - 200 are "fundable."
  - 15 of those generate 95% of returns.

If a single VC firm were to fund all 4,000 startups (or even a representative sample of them), they'd be out of business in a few years. A "startup index" unbiased by due diligence is a pretty bad idea from an investor perspective.

That said, if you want an example of a seed fund with a pretty broad approach, take a look at the aptly-named 500 Startups.

How has the 500 Startup Fund done?

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