There’s lots of talk among Silicon Valley entrepreneurs about the importance of finding “smart money”—the venture and angel investors whose sheer acumen supposedly allows them to outperform the market and shepherd startups to success.
Trouble is, venture returns for the last 10 years actually lag behind those of the broader S&P 500. The average venture firm “can’t outperform a grandmother investing in an S&P Index fund,” as veteran journalist Tom Foremski comments wryly. The truth is that every high-tech startup faces a minefield of tough decisions, and no investor can really know the right way across it.
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