In a recent New York Times article entitled Some Unrest Is Bubbling Beneath the Top Tier  author Matt Richtell shares a key issue faced by venture capital firms -- satisfying limited partners.
Limited partners are the firms that invest billions of dollars in venture capital firms so that they can then invest in high-growth ventures.
At the end of the day, limited partners want a return on their money. Specifically, they want distributions from their investments in the venture capital funds, and they want it in a timely fashion. "It's been almost a decade," said Eric Doppstadt, director of private equity for the Ford Foundation, which invests in venture capital firms. "I find it shocking that an asset class that has provided so little payback continues to attract so much capital."
What may be most interesting is that success in the venture capital industry has been "highly concentrated among fewer than 40 venture firms." So, while firms like Kleiner Perkins, Sequoia, Benchmark and select others are earning nice returns for limited partners, most of their peers are not.
Part of the challenge is that it typically takes six years from the point when a venture capitalist invests in a start-up company to the time that the startup exits and the investor sees a return (and can pay their limited partners). Since we're only six years past the bursting of the dot com bubble, limited partners are going to have to wait a few more years before seeing their returns go up again.