"A 30% return (the minimum needed to give LPs a return commensurate with venture risk after the GPs have taken a 20% performance cut) on $1 million is $300,000. A 30% return on $1 billion is $300 million. Basically, unless you land a Google-like winner, it is very, very hard to get a $300 million return."

The writer has no idea how a fund works or how to calculate returns. That statement assumes the lifespan of the fund is one year, which it isn't. The lifespan of a fund is usually 5-9 years. When you hear about Sequoia returning 140% on their 2001 fund, that is per annum over the life of the fund.

So going by the $1B example. If you have $1B to invest, and have set a target of a 30% return, you need to return $300M each year to your investors. That is almost impossible in years one and two (and even three) so its usually a curved path of returns (that dies down towards the end as the last investments are either killed off or sold for scrap).

As for fee's:

"Ahem, 2% of $1 billion is $20 million, which should be enough for a coupla Partner Ferraris. "

The 2% fee is also per annum. Most funds are not $1B, but they are $150M - $500M, so the fees can really build up. The better funds wont charge fees in years where there were no returns or heavy losses, or in the later years of a fund.

As for the actual interview - not much substance there either.