vc

Research agents will accelerate this convergence, with algorithmic analysis driving firms toward identical conclusions about opportunities.

I’ve been thinking about what makes certain venture firms work while others don't. I believe the answer might be simpler than anyone wants to admit: outlier firms are built by outlier investors looking for outlier founders .

On the other hand, when many market actors do so to catch a few companies, this deprives the investment of its optionality, creating regression to the mean. When it becomes systematic, overpaying is an effective way to kill the whole portfolio’s optionality. While one can only hypothetically argue that the chances of a better outcome tomorrow... See more

I believe that within a decade the number of funds will be 30-50% less than it is today , even if the money into the sector remains similar. This will kill the middle of the industry , bifurcating venture into massive scaled platforms who look more like offshoots of government-come-hedge funds, and a long tail of specialists who will capture all... See more

I’ve long joked venture is finance for people who don’t understand how money works, and it really has felt like this for a while - with certain exceptions there has been minimal innovation on the 2% management fee, 20% carry model in the 25 years venture has been active in Europe. Perhaps little wonder when you consider the classic path of... See more

This leads to a go-for-broke approach. All the capital quickly funnels to companies with an infinite narrative, business fundamentals be damned.So if you are a scaled player in a market where the power law is the consensus, there is really only one rational strategy. And that’s to be a price-insensitive index of any company that has the potential... See more

Today, it’s quite different. The VC side has unbundled into all sorts of niche firms who act as signal for larger multi-stage GPs, and who partner at nearly every stage of technology risk level.

When money is worth little, it’s easier to get it from LPs, and tougher to sell it to founders.