A literature review of relevant research on VC firms finds that the average returns of VC are roughly equivalent to that of the stock market though with significant variation and methodological uncertainty (Rin, Hellmann, & Puri, p78-80). Furthermore, choices of sampling periods and methodology can dramatically change whether venture capital is determined to be more or less profitable than private equity on average (Rin, Hellmann, & Puri, p90).
This sounds exactly like what I would expect given an efficient market for investments. If one asset class or the other delivered superior returns, I would expect capital to flow in to the area where returns were greater until low-hanging fruit was picked and returns equalized.
This sort of thing might not occur in a charitable giving ‘market’, however.
This sounds exactly like what I would expect given an efficient market for investments. If one asset class or the other delivered superior returns, I would expect capital to flow in to the area where returns were greater until low-hanging fruit was picked and returns equalized.
This sort of thing might not occur in a charitable giving ‘market’, however.