> One Midwest LP who represents a family office and began receiving invitations to these affairs last year – one year after he began investing in privately held tech companies – has already backed a dozen startups out of YC. They represent one-third of his current portfolio of direct stakes.

> “I find [YC’s] batches are always the best of any accelerator class or demo day that I attend,” says the LP, who asked not to be named. “I’ve found a number of opportunities that were as exciting as any we’ve pursued.” YC’s endorsement, he says, is “a very important signal to us.”

An admittedly more cynical reading of this:

* Family office LP has very limited experience investing in privately-held tech companies.

* LP relies heavily on signals like "YC participant" because LP brings no unique investing insight to the table in this area.

The vast majority of LPs have no business investing directly in startups because they have no ability to add value to the individuals and institutions they represent, are incapable of performing adequate due diligence, and don't have the bandwidth or experience necessary to manage these kinds of investments.

Whether or not the current turmoil in the public markets is the start of something bigger or not, LPs itching to make direct investments strongly suggests that we are at or close to the peak in the current tech investment cycle.