The article also notes that the rise of mega-funds and multi-strategy firms has created dynamics similar to Wall Street, leading to restlessness among partners who feel their expertise and passion lie in early-stage investments. As a result, many are leaving to form new firms with a focus on specific sectors such as AI, where they can leverage their technical expertise. The availability of diverse capital sources is enabling these emerging funds to establish themselves, with the potential for significant returns. The article suggests that this new generation of venture firms, while still proving themselves, is adept at raising funds and capitalizing on the evolving landscape of the venture capital industry.
Key takeaways:
- There is a trend of partners leaving established venture capital firms to join emerging funds or start their own, driven by changing financial incentives and partnership dynamics.
- Conviction, co-founded by Sarah Guo and Mike Vernal, exemplifies this trend with its focus on AI and successful fundraising for its second fund.
- The shift in venture capital is attributed to factors like evaporating financial incentives, bloated partnerships, and the rise of mega-funds, leading to restlessness among partners.
- Specialist funds with a focus on areas like AI are gaining traction, as they offer deep tech knowledge and have relatively painless fundraising processes compared to traditional firms.