The New, New VC Firms

Yesterday, I connected with two folks, who wanted fundraising advice.  Each is making plans to start his own VC fund.  Today, a friend of mine just announced that he is doing the same.  I know of a number of others fundraising currently for small one-person/two-people firms.  I’m sure there are quite a few others out there, but whom I just don’t know personally.

The VC industry reminds me of other industries:

  • An industry starts, takes off and the first-movers develop phenomenal brands and the lion’s share of the rewards
  • 30 to 40 years in, industry performance suffers.  A shake out happens. New firms get started.  Some old firms fail

The VC industry, I think, follows that pattern.  VC returns started to be measured only in 1982.  The industry is about 30 years old.  So, it is at the point when most industries go through change.

Change is inevitable.  Market leadership revolves.  The public stocks that led the markets 10 years ago aren’t the ones who lead the markets today.  Firms come and go, as do nations and empires.

Many of the established VC firms will continue to excel, IMO.  But, new entrants will come in and also do well.  It would be ironic if the industry that funded innovation was itself exempt from innovation.


One thought on “The New, New VC Firms

  1. I agree completely and hope that the innovation is not only seen in new players but also incorporating some of the lessons of the last thirty years in the business model of venture capital.

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