RT Journal Article SR Electronic T1 Simulating the Effects of Fund Valuation Policies on the Measurement of Risk in Venture Capital JF The Journal of Private Equity FD Institutional Investor Journals SP 49 OP 60 DO 10.3905/jpe.2006.667558 VO 10 IS 1 A1 Tom Grossi YR 2006 UL https://pm-research.com/content/10/1/49.abstract AB The common venture capital adage that there is “too much money chasing too few good deals” is in essence an indirect criticism that limited partners are not demanding sufficient risk premia from their venture portfolios. But the lack of objective, regular pricing data for venture fund assets makes this a difficult charge to evaluate even with the benefit of historical hindsight. How risky is a well diversified portfolio of venture funds and what kind of mean returns should LPs demand? This article explores that question indirectly by using computer simulations to estimate how much underlying asset risk may be masked by venture firms' portfolio valuation policies.TOPICS: Private equity, VAR and use of alternative risk measures of trading risk, simulations