First, most venture capital firms use antiquated business models that prevent them from being able to move quickly, reach scale, and establish strong competitive moats. Most venture firms are built on a partnership model, like law firms.

The relationship between founders and their investors reflects a status shift too. Venture capitalists have been dehumanized.8 When firms were led by individuals with recognizable taste and conviction, founders treated allocation as something worth thinking about. Now the partners are interchangeable, the institutions behind them are... See more