Every time there are new venture capital performance statistics announced, lots of people, including me, decry how over-funded the segment is and claim that it has to shrink.  And, over time, it will shrink.  But, what does this environment mean to entrepreneurs?

The fundamental problem with the venture capital business is that the VC investor's expectations are no longer aligned with that of an entrepreneur.  According to the latest statistics on exits from venture-capital backed companies, the average merger exit this year is $92M (and that's only for the ~25% of the deals where the transaction size is announced).  I'm willing to bet that the unnanounced transactions average a much lower price, although there are always some significant deals where the value isn't announced for various reasons.  Let's be optimistic and assume that the average for ALL venture M&A exits this year is something like $70M.

Now, if you and your co-founders could start a company from scratch and make it worth $70M, you'd think of yourself as being pretty successful.  But, to a VC, t