The entrepreneurial experts at the Kauffman Foundation think so. Their new study declares the VC industry has gotten too big, and isn’t returning what it should to investors. Essentially, the players involved seem to be maximizing their own returns, with less-than-optimal returns for the rest of us:

Limited Partners—foundations, endowments, and state pension fund—invest too much capital in underperforming venture capital funds on frequently mis-aligned terms. Our research suggests that investors like us succumb time and again to narrative fallacies, a well-studied behavioral finance bias.

Here’s the full report (hosted by GigaOm) — I’m just starting my way through it. The logic is a bit clunky for the outsider, but I’m thinking we might be able to tear into this and break down the important implications for an upcoming show…