A successful VC predicts what the next 10 years in the venture capital industry will look like
Jan 04, 2025 - businessinsider.com
Alex Witt, founding partner at Verda Ventures, shared his predictions for the venture capital (VC) industry over the next decade, emphasizing three key areas. First, emerging managers who have launched fewer than three funds will gain more attention, as smaller funds have consistently outperformed larger ones. Witt highlighted that limited partners are recognizing the potential of these new managers, who have been traditionally underfunded. Second, Witt identified five transformative technologies—generative AI, robotics, autonomous electric vehicles, blockchain, and biotech—as having massive VC potential, marking a new "industrial renaissance." He stressed the importance of VCs backing category-defining companies in these emerging industries, despite the challenges of identifying winners.
Additionally, Witt pointed to Africa and the Global South as leading regions for VC-backed innovation due to their explosive consumer and market growth potential. He noted that demographic shifts, particularly in regions with young and growing populations, will increasingly influence VC trends. Witt argued that these areas offer significant opportunities for innovation and growth, contrasting with countries facing aging populations and declining birth rates. He concluded that large populations equate to large markets, where a few successful companies can offset multiple failures, making demographic-driven investments a critical strategy for future VC success.
Key takeaways:
Emerging managers with less than three funds will drive the highest returns in the next decade.
Venture capitalists have an unprecedented chance to back five transformative technologies: generative AI, robotics, autonomous electric vehicles, blockchain, and biotech.
Africa and the Global South will lead in VC-backed innovation due to their explosive consumer and market growth potential.
Demographic shifts will redefine traditional portfolio strategies, emphasizing investments driven by population dynamics.
