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“Big firms have purchased much more, much more,” said Alexander Lazarev, head of the Fluent Ventures partner. “At the same time, there was an explosion (small) companies of venture capital … So I think we watched the rise of specialization and the growth of regionalization in technology.”
Johnnygreig | E+ | Gets the image
Venture capital industry confronted reports Many top -level executives leave outdated firms.
In the silicone valley some loud trips include Matt Miller from sequoia and Shrir Krishna From Andresen Haravitsa. On the other side of the world, two heads of the senior Angel Anand And Shailash Lakhani announced his exits from the Peak XV Partners – the former Sequoia Captability & Sea – in February.
According to industry insiders, the trade turnover is common among juniors in this area, but it is rare that senior venture capital partners leave their positions, as these high -level positions are often more profitable and difficult.
I think that over the last decade we have seen a great change of the sea, which led to the enterprise (capital industry), which turn into asset management more widely, and I think it is actually the essence of this issue.
Rick is the Zula
Founder and head of a partner equal to businesses
Move on for success
The reasons for these trips include the perception of some investors that decision making in many large firms is slow, and the funds are focused on increasing the money they control rather than working with promising founders.
Some investors in this camp also say they will take advantage of great changes in the field, leaving the shortcomings of large firms for the benefits of the smaller ones.
Over the last decade, the venture capital industry has been transformed as large hereditary firms have attracted more dollars worldwide. In 2024, only nine venture capital firms raised $ 35 billion, or 50% of the total capital collected by US funds, according to Book.
“I think that over the last decade we have seen a great change of the sea, which has led to the enterprise (capital industry), which turned into asset management more widely, and I think it is actually the essence of this issue,” Zul said.
“(Venture capital firms) are now scalable to become more like … Blackstone or Goldman Sax … And this leads to some cultural dissonances between people who want to be pure gaming capital and people who want to become asset management firms,” Zul said.
As the outdated firms grew, some older partners say it took them away with the original admiration of venture capital.
“Big firms have purchased much more, much more,” said Alexander Lazarev, head of the Fluent Ventures partner. “At the same time, there was an explosion (small) companies of venture capital … So I think we watched the rise of specialization and the growth of regionalization in technology.”
On the one hand, as more money focuses on several elite firms in the silicone valley, some created investors decided to branch and start their own fund, where they can have more control over their decisions, and invest in things they have a high conviction, Lazar said.
And with the growth of technological platforms such as Angellist and Carta, it became easier for people to start their own venture capital funds, he said. In particular, limited partners – or those who invest in venture capital – have also become “more comfortable” investments in solo executives today, he added.
“Some of these very large -scale companies have a bunch of incredible venture capitalists who have been huge success now, which they do not want to be heads of assets now … They do not want to deal with bureaucratic or corporate structures,” Tsula said. “They just want to go back to the basics.”
Bilal Zuber – one of them: he announced Its departure from Lux Capital in December, acting as a general partner at the company for about 12 years. Today, it starts its own venture fund called Red Glass Ventures, which is focused on investment in the early stages.
Then suddenly, the music chairs stopped. The IPO market closed, goes out (went) down, M&A dropped, and so I think a lot of LPS (there’s too much money on a relative basis in the category, (and) insufficient liquidity to return.
Alexander Lazarev
Chapter of a partner, Fluent Ventures
“If you are a very large fund, it becomes very difficult for an older partner … to focus early on,” he said. SEED and Series A startups are often left for young team members that “not the best product for the founders,” Swuber CNBC said.
“The founders would like to work with older, experienced investors who could take up places … And give real advice … And, frankly, it’s just difficult to make a bigger firm,” he added. “If I can write an early conviction check, I would have high ownership, and if … Company well, it really comes back alpha.”
Transition from failure
But not all trips voluntarily.
“There are many people who are simply pushed out of these firms very silently … The consolation of the award” not the creation of a general partner of these firms “is that they become a leader that develops and serve new firms,” Zul said.
According to industry insiders and abroad, the Silicon Valley was more difficult because the industry is experiencing a major decline.
This is largely fueled Interest rate policy The US Federal Reserve, most recently during the 2020 pandemic – set rates for almost zero – which made borrowing cheap and stimulating investors to deploy more funds on startups and other more risky assets.
As a result, the launch ecosystem saw a large splash of venture investments in the pandemic years COVID-19, but when the interest rates retreated 2022Investors became much more careful and realized that some startups may have been inflated.
“I think one of the problems that have occurred over the last couple of years for LPS (with a limited partner) … is that the return speed was much higher in 2021, through a variety of IPO. People returned their money,” Lazarov said.
“Then suddenly, the music chairs stopped. The IPO market closed, goes down, M&A decreased, and so I think many LPS (have too much money on a relative basis, (and) insufficient liquidity to return,” the Lazarov added.
Influence on portfolio companies
Often inadvertent consequences of partners leaving their funds is that their portfolio companies can affect. So, how do these venture capital departments affect startups? The short answer is that it depends.
According to some companies, senior partners often occupy a place of council in their portfolio companies and will become long -standing teachers for the founders, but this is not the case for some companies, according to industry insiders.
“Three of our portfolio companies had at least one board member, it means that the person left his company, and we had several companies that lost several (board members),” Zula said.
“I think the best way to do this is very thoughtful about the transition with a portfolio, the CEO and the founder,” Lazarev said. “It is important that the company does not become an orphan in the LCD fund and has continuity.”
The departures can adversely affect portfolio companies when the startup had a strong champion on the council, which also faltered a lot in his firm. If these partners are replaced by someone younger, it can violate the council meetings and decision -making, the industry insiders said.
In addition, companies seeking to raise more money at the expense of the next round-the-date investor makes further investments in the company-can affect if their original champion will no longer help them vouch in the firm.
Startup’s maturity can also play a role in how the founders affect.
“It depends on the stage of the company. The later you are, the less likely you will need any recommendations, because you are an expert on issues,” said Aaron Tan, co-founder and Carro CEO.
“Most (partners) are not quite operators,” said Tan, so the founders may not count on them in the first place.
While early -stage companies can affect, as they usually need more recommendations from their partners or members of the Council, in the following stages of the founders who have more experienced, and often many other members of the board that can be hoped, Tan reports.
