He notes that the performance of early stage funds is disappointing. For the period ending 9/30/2102, early stage funds have one quarter returns of 1/4%, one year returns of 13.2% and 10 year returns of 3.9% compared to NASDAQ returns of 6.2% (one quarter), 29.0% (one year) and 10.3% (10 year). Early stage investing is hard, he states and asks that entrepreneurs have some empathy for VCs.
One thing I think is important to note is that these numbers are aggregate numbers and are intended to represent the overall industry. Most LPs are looking to invest in top-quartile or top-decile managers, where the alpha achieved by these managers can add 700 to 1000 bps, or much more, to the returns. So yes, early stage venture is hard, but the best managers (and I believe Union Square Ventures to be in this group) will still be able to provide exceptional returns to their LPs.
Here's a link to the post: http://www.avc.com/a_vc/2013/02/venture-capital-returns.html