Despite the rush of money chasing the incredible returns, possibly building up a speculative bubble, Meyer says that venture capital investment should not be labeled as a fad. He notes that venture capital is at the heart of the capitalist economy, in some ways more than stock market investing.

And this increased interest in investing in venture capital is not all good news for Harvard. Last year the University was not able to invest as much money as it would have liked in venture capital. Venture capital firms are not able to accommodate the heavy requests to invest and are force to set caps on the amount of money universities can invest. Because Harvard's endowment is so large the smaller amounts have less effect on the bottom line.

"Ten years ago Harvard had little trouble putting as much money in [venture capital] as we'd like," Meyer says. "Today we'll say $70 million and they will take $25 million."

Meyer says that since July 1, HMC has been able to bring its venture capital investments close to its 15 percent goal. He also notes that one reason Harvard had problems being fully invested in venture capital was that it tries to only invest in the top-tier firms with proven track records, not wanting to face undue risk.

Risky Business?

The possibility of triple digit returns does not come without some substantial risk, however, Meyer says.

"Venture capital firms loose all of their money on 80 percent of investments," Meyer says. "However, if the home runs are big enough, they can do fine."

Meyer and Phillips say the third-party investors can make a big difference in how much the schools gain from venture capital.