Something ventured, nothing gained – writes Ray Maxwellp

One of the greatest mysteries of our time is the general failure of venture capital to live up to expectations. It is perverse that an asset class that exhibits steroid levels of risk generates such low levels of return. Samuel Johnson, the British linguist of the 1700s who pioneered the English dictionary, remarked that “second marriages are a triumph of hope over experience” and the same comment could aptly be applied to venture capital. As an asset class, it has only periodically delivered returns and, even in good times, the range of returns between the best and worst performers has been immense. It will be worthwhile exploring why this has occurred and whether or not venture capital can survive.