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Many entrepreneurs, and the venture investors who back them, seek to build billion-dollar companies.

So many folks in the venture capital business are sheep that just want to follow the herd. They are momentum investors purchasing highly illiquid investments. That is a recipe for disaster.

Picking winners among the many young companies seeking money is a tough business, even for the most sophisticated investors. Indeed, most professionally run venture funds lose money. For individuals, it's pure folly. Buy a lottery ticket instead. Your chance of winning is likely to be higher.

Venture funds get beaten up for not investing in important things. Okay, if you want venture funds to invest in important things, then don't penalize or make fun of them when those important things don't work.

There are lots of ways to make money in venture capital, and there are even more ways to be mediocre. The industry has too much money and too many smart people chasing too few great entrepreneurs.

It is intellectually dishonest to lump venture investors with hedge fund and buy-out investors.

If I were to leave and raise a venture fund, I would have to find 10 or 100 LPs. They would all give me a bunch of money, and I would take a percentage of that to pay myself. They would expect me to invest that over the next three years, and they want that money back in seven or eight years.

When the venture capital industry invests, it's usually because they sense there is money in them hills. And often it takes a high-profile winner to wake everyone up in the category. SpaceX is that company.

At the end of the day, VCs have to provide their limited partners with great returns, or they aren't going to be able to raise another fund.

Nothing turns off an investor more than when an entrepreneur comes in with a ridiculous valuation.