Working for whom? It's probably great for Fred Wilson if he's managing a bigger slice of the total VC pie, but for everyone else, it's best if VC is a large-scale, productive way to invest money -- then it makes money for our pension funds and creates new economic opportunity.
I see it a little differently. There are only so many viable opportunities available at any given time to invest in. Even if you believe the number of good opportunities is limitless, number of capable people who can act on them isn't. As the amount of money chasing deals goes up the competition for good deals goes up and VC suffer because they end up with worse terms. Many stupid deals also get funded. Both of these are bad for the VC industry, both are bad for their limited partners (including our pension funds) both are probably good for entrepreneurs.
In order for that to happen, then we need a lot of growth of Lean Startup-type startups who inexpensively validate a business model then go to VC for scaling money. This would reduce risk for VC and make less talented VCs more able to invest more money. But this is all on the entrepreneurs and entrepreneur-trainers to implement.
You assume your conclusion: that large-scale VCs catering to pension funds make money. Most of them didn't make money. They were just really good at selling to pension funds and giving themselves fees.
