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The Unholy Trinity of Venture Capital Agglomerators: Bigger funds, bigger fees Allocators: Yield farming vs. venture-scale returns Absorbers: Hungry, hungry capital hippos looking for as much capital as possible The loudest people with the most capital are reshaping venture… https://t.co/pkQ1ahxjNV
"Only 17% of venture funds larger than $750M have ever returned to limited partner investors more than 2.5x TVPI net of fees and expenses compared to 25% of funds smaller than $350M. Said differently, a smaller fund is roughly 50% more likely to return more than 2.5x than a large… https://t.co/QGNub12nTA
VC’s Biggest Issue Altimeter’s @jaminball discusses what may be one of venture capital's most pressing challenges: the shifting alignment between VCs and founders. As funds grow from millions to billions, the dynamics that once drove shared success are evolving—and not always… https://t.co/yclh6QHY6q
In the third quarter of 2024, nearly half of venture capital funding originated from mega-rounds, raising questions about the sustainability of this trend and its impact on market perceptions. Limited partners (LPs) are increasingly cautious, favoring specialized early-stage managers over growth funds. Insights from industry discussions highlight a growing misalignment between general partners (GPs) and founders, as venture capital dynamics evolve. Notably, funds larger than $750 million have a lower success rate in delivering returns compared to smaller funds, which are about 50% more likely to exceed a 2.5x total value to paid-in (TVPI) ratio net of fees and expenses. This shift in venture capital is characterized by larger funds imposing bigger fees, while allocators are caught between yield farming and venture-scale returns.
