I suspect a problem with late stage investing is that some of it is marketing for the investment funds. You make a late stage investment in Uber at $40+ billion valuation so that you can tell people you invested in Uber. People who aren't paying much attention assume you are very savy, making a 10-100x return, when you may only be making 1-2x at best.
People assume institutional investors are "smart" so they won't fall for things like this. In some ways they are smart because they tend to be systematic (less emotional than individuals), but in other ways they follow the herd. They need to be involved in whatever is hot.
People assume institutional investors are "smart" so they won't fall for things like this. In some ways they are smart because they tend to be systematic (less emotional than individuals), but in other ways they follow the herd. They need to be involved in whatever is hot.