Could you explain to me the funding chain a little better? From what I understand, VCs raise money from "Limited Partners", but I never understood who those guys were and how they got their money. Pension funds and such?
You got it: Pension funds, endowments, foundations, union retirements funds, rich families, anybody who has a lot of money and wants to diversify into a high-risk, high-return fund.
They basically trust smart people, who have presumably succeeded at this in the past, to pick more net winners than losers and earn a return on their money.
