More on Harvard's Endowment Woes (Pay Attention Startups and VCS)

Remember the column I did about the bluest of the blue blood endowments looking to sell off their stakes in venture firms in the secondary market? As I said then, it wasn't necessarily because they don't believe in the asset class, but with the mass beating they are taking in almost every security they're invested in, they have to realign their portfolios, and in some cases get some liquidity.

Here's more today on just how bad things are for Harvard's incredible shrinking endowment. The gist: The $8 billion loss the $38 billion fund reported is probably more like $18 billion-- in part because illiquid assets, like stakes in private companies, that hadn't been marked down when the previous figure was announced. This is a big reason one of my sources thought it'd be 2009 until secondary buyers snapped up the stakes in venture firms, no matter how big the name. No one knows what they are worth.

I found the Huffington Post story via The Atlantic and the tone of the post there reveals there's no small amount of schadenfreude when it comes to watching Harvard stumble. That's not just a Wall Street thing. Here in the Valley there's plenty coming from firms that didn't measure up to the Yale/Harvard standards, as well as from other LPs who were never deemed at the Harvard/Yale level. But to be fair, it's not like anyone is skating through this market unscathed, and if it weren't for schools like Yale and Harvard believing in venture capital early on, the industry wouldn't be as big as it is today. (Of course, some say that could be a good thing. But that's another column...)