I share Fred's concerns about too much capital flowing to Venture Capital. In 2000, at the peak of the internet bubble, roughly $86 billion was invested in venture-backed companies. No wonder this launched a decade of sub-par industry average performance. Clearly, $86 billion is too much. On the other hand, when less than $20 billion was being invested per year in the 1990's, performance was exceptional in an extraordinary period of time (strong economic growth, rising stock market, incredible technology innovation, healthy IPO market, etc.). The question is how much money can be invested annually in US venture capital-backed companies (from all sources - angels, venture capital funds, foreign money, corporate investors, incubators and crowdfunding) for the industry to provide meaningful returns. While certain venture firms seem to consistently provide strong returns over time, a glut of capital will impact all venture investors through higher entry valuations, competition for deals, and more wanna-be companies getting funded. In my opinion, the model can work with $30 billion per year invested in venture-backed companies, assuming venture capitalists are selective and diligent. However, if the amount invested in venture-backed companies grows to over $40 billion per year it will lead to depressed returns, in my view.