Currently, the IRR across the VC industry is dismal, and will continue to be so, except for those innovative firms who adapt and pioneer the necessary new model. If you ask entrepreneurs, they will tell you VC is broken, because it doesn't serve their needs. And LPs know it by way of poor returns. The global financial system collapse has masked many of the secular trends in VC and technology innovation, which were destined to collide with an archaic VC industry in any case. The biggest such trend, rate of change, is unrelenting and driving radical change in the industry. Sadly, a number of VCs I've talked with don't even see this.
If you find this useful, feel free to pass the word, especially to the LP community. And contact me with further thoughts.
Disclosure: no positions