Financial advisors are trying to understand if venture capital at the moment is a solid alternative investment class for their clients. Venture capital is a long-run investment. Partnerships typically have lives of 10 years, so this is a long-term relationship. If you're to be successful in venture capital, you need a degree of diversification as well. Over time the returns that venture capitalists have gotten from investments initiated in any given year have varied considerably.
Venture capital is a challenging place to invest.
It's a much less efficient market. Typically venture capitalists will initiate investments over the first two or three years of the fund. You don't know which years are going to be good or bad. So you want to be really sure that you're not taking all your powder and putting it in funds together in one year. You diversify over time and sectors.