come on, you can tell a hot deal when you see one.

How many would like to invest in facebook, these guys learnt the best deals using their position collecting hefty management fees. VCs are middle men, they create no value other benefit themselves.

I see your point, Joe, and agree on some levels. Imagine the brouhaha if they'd invested through the fund—outside their usual portfolio guidelines—and it had gone bad. As the story notes in a blind quote: "For every one of these successes, there are a hundred failures" and that the IVP investor said they took a chance and got "lucky." (IE, reward for risk.) I do, though, keep thinking that they had the option to do nothing. Pass on the deal, and move on to things that were of benefit to the fund. That, perhaps, would have been the decision with the highest ethical value and the one of most comfort to fund investors—spending their time on deals for the fund, disclaimers to the contrary in the WSJ story notwithstanding.

Oh, and Joe: Happy Birthday.

This is an interesting story, but I'm having a hard time seeing the there there, to use an overused cliche.

This isn't like insider trading, where the VCs had some insider knowledge that they enriched themselves on.

And this isn't frontrunning (investing in something personally, and then having their clients buy afterwords to push up the price.

If it's true that IVP typically invests in latter-stage tech companies, it would've been odd for Photobucket to be part of the limited partners' portfolio. It's easy to say in retrospect that this grand slam investment should've been part of the portfolio, but the majority of the time a tiny speculative deal like this would've been a loser, one which would've stuck out like a sore thumb in IVP's actual portfolio.

I don't consider IVP among the elite, prestigious or high quality firms in the country so I am not surprised by the conflicts.