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data-driven VC is over
The Great Bifurcation: Artisans vs. Scaled Asset Managers
In many industries, we’ve seen a bifurcation into niche and sprawl. Into depth and breadth.
Take the news industry. If you’re thriving in news, you’re likely either (1) narrow, nimble, and focused, like a successful Substack publication with a single journalist, or (2) you’re a multi-product b
... See moreI loved this concept of evaluating your own potential cause of death as a venture firm. Over the last few years the number of venture firms has grown from ~900 to nearly 2,000 different firms managing $500B+ of capital. In a market correction some people predict as many as 50% of those firms could fail. One prediction I have is that as venture fund... See more
Kyle Harrison • The Death of a Venture Fund
None of this bodes well for many of the new VC entrants who have suddenly become enamored by the capital return potential of science. We have a view that real advances in science are relatively rare, that they are hard to produce, and they tend to be signaled by clear research evidence years if not decades in advance. Venture capital is not a fit f... See more
Danny Crichton • Lux Capital Page Not Found
But just like the internet, someone will show up later and think about something like Uber and cab driving. Someone else showed up and thought, “hey, I wanna check out my friends on Facebook.” Those end up being huge businesses, and it’s not just going to be one model that OpenAI or Databricks or Anthropic or someone builds, and that model will dom... See more
Sarah Wang • What Builders Talk About When They Talk About AI | Andreessen Horowitz
So if not for the structure, what caused venture’s shift towards such risk-averse investing? As fund sizes grew dramatically and a tech boom spurred a startup surge, the industry's emphasis shifted from discerning selection towards a more diversified 'spray and pray' approach, diluting the value of traditional tasteful investing. When the game of b... See more