Mr. Swensen manages Yale University’s endowment and is the inventor of the so-called “Yale Model.”  Basically this is a model for people who manage the largest pools of capital in the world – universities, pension funds, wealthy family funds, etc.  The major idea behind the Yale Model is to put significant portions of one’s fund into “alternative asset classes” like venture capital.   Yale had phenomenal returns for many years (until this year, which was a disaster) and thus was copied by fund managers around the world.  This created demand to invest hundreds of billions of dollars into VC funds.  This in turn radically increased competition amongst VCs, thereby driving down their returns (public pension funds like California’s release the returns of their VC investments and they aren’t pretty).

What this means is that there are lots of VCs out there with huge funds and very little chance of getting “carry” (performance fees), since most will have negative returns (and they know it).  So instead they are collecting management fees (typically, 2% of the fund for 10 years, so 20% of the total fund).  They need to justify collecting these fees, which is why if you hang out with VCs you’ll often hear them talk about needing to “put more money to work.”  I would bet that the new investors were the ones arguing for Twitter to raise more and more money, even if it meant a higher valuation.  I’ve seen it happen many times.

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Today, I was on gap.com and forgot my password.  When you put in an email on their login page and click “I forgot my password” they show you your password hint.  You can put in any email address and find out their password hint this way.  This is a great way for hackers to figure out your password.  (How many people just use the password itself as their hint?  I bet a lot).

When I saw my own hint I put in a long time ago, I had to chuckle at my obnoxious former self :

For the first 4 hours or so it was acting strange (speaker didn’t work, home button didn’t either) but now works perfectly.

Now if they could just make an iPhone that stopped dropping calls it would be the perfect device!

accompanying sign reads “The night we took back america”