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Diversification. VC most likely will be more risky or volatile and return of it won't be similar to S&P500. Main idea is to mix different asset classes - S&P500, VC, hedge funds, bonds and etc, to get smooth results during good and bad times.

> Why would anyone put money in such a fund?

For the same reason people play any lottery: they don't look at the expected value, they look at the outliers and think, "That could be me, but only if I buy a ticket."

s/"play any lottery"/"founding a startup"/g

The 50% return is just an input to the model, an assumption.