The words "zero-percent returns," when applied to venture capital, always inspire a raised eyebrow.

That's never been more the case than in Kevin Kinsella’s recent piece for VentureBeat. Kinsella, founder of VC firm Avalon Ventures, writes that many venture capital firms appear to be "logo-hunting" unicorns, or startups that have achieved billion-dollar valuations.

In other words, these VCs are investing money long after most of the risk has been eliminated, but just in time to claim the company as a portfolio company and put its logo on their own web site. As Kinsella writes:  

Reading through the CB Insights data, we find that Kleiner Perkins Caufield & Byers piles up unicorn logos, with 12 currently, but it hasn't invested in a single one at the early stage; meanwhile, Andreessen Horowitz has 10 unicorns, but only two were early-stage investments. These VCs are willing to stomach zero-percent returns on these companies because it's probably worth the payoff they get in terms of higher visibility.

This so-called unicorn-hunting distorts the overall venture capital investment data. And it continues to emphasize a startup's valuation as determined by investors, which can be very different than its eventual worth at exit.

In the first quarter of 2015, venture investors put $11.3 billion into 805 deals, according to CB Insights. That's an 18 percent drop from the fourth quarter of 2014, which sounds a bit ominous. But here’s the thing: Most of the drop is attributable to late-stage funding deals. In the last quarter of 2014, those deals were up 30 percent. In 2015, they were down--sort of.

CB Insights only tracks investments by venture capitalists, and it turns out that such investors are no longer the primary players in big, late rounds. So the amount of money invested in those rounds, and overall, appears to have dropped dramatically. But it’s mostly just that VCs are being replaced by other investors.

Sure, the biggest funds, as noted by Kinsella, can still play at the very late stages. But mostly, those late-stage rounds are being financed by hedge funds, mutual funds, sovereign wealth funds, and private equity. Not venture capital.

"Late Stage VCs Crowded Out," reads the headline of the CB Insights report. That's right--crowded out. In other words, there's so much competition for big-name deals that might not ever bring in substantial returns, that many VCs can't get into them.

"There is a tremendous froth developing in the late-stage VC industry right now," says Sramana Mitra, the founder of virtual global accelerator One Million by One Million, and who recently published a blog post called The Commoditization of Venture Capital. "People are raising huge amounts of money at astronomical valuations."

That's part of the reason venture fund New Enterprise Associations closed on a record-breaking $3.1 billion fund on April 15th. Some $350 million of that is specifically earmarked for late-stage deals.

"As a growing number of companies are scaling faster but staying private longer, large venture growth rounds are increasingly prevalent," said NEA managing general partner Scott Sandell in a press release announcing the new fund. "Occasionally we would like to put more dollars to work in these later-stage financings." 

Of course, as Mitra and others have pointed out, these valuations have a limit--and that limit is the public market, which Mitra says is not as frothy as the late-stage private market. It's also why private-market unicorns may become a bit less outstanding after they IPO in the public markets.

Unicorn startups have become disarmingly common--The Wall Street Journal last counted 83 of them. Much more rare, and perhaps in need of a bit more respect, is the unicorn exit.