institutional LPs will be less motivated to invest in emerging managers directly if they receive sufficient exposure to them through their existing fund investment

Strengthening incumbents' positions as arbiters of innovation capital. These large funds have a vested interest in controlling distribution, and favoring them distorts capital flows into the startup layer and risks emerging funds’ future market leadership potential.

There’s a bit of an “everything old is new again” feeling here. In 2014, Y Combinator announced that in order to “reduc[e] conflicts”, they had ended all “LP and LP-like ... relationships with several VC firms”. I don’t know if YC’s LP base still excludes VCs, but this decision is one of few public acknowledgments I’ve seen of the fraught nature of... See more

1. The funding gap has widened. There has been a more extreme consolidation of capital at both the fund & startup level, as the increases in dollars allocated to funds and startups have outpaced the increases in the numbers of funds and deals.


2. Becoming a VC is easier, but staying one is harder. While the barrier to entry for first-time funds has

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