The Quiet Evolution of the Venture Capital Industry

Welcome to the 11th Network Effects Newsletter. For most of its history, VC was a game of scarcity: scarce capital, scarce founders, scarce information. Today, capital is abundant. Founders are everywhere. AI compresses time and cost. The rules have changed, and the best firms are adapting. Today, we’re exploring the quiet evolution of the venture capital industry, where VC firms… Are expanding through buyouts Are restructuring their fund offerings Are targeting a new LP base beyond institutional investors Let’s Dive in In 1980, there were only 50 venture funds. Today, there are ~3,000 VC funds globally, up 60x. In 1980, IBM was the only technology company in the top 10 publicly traded companies Today, 8 of the top 10 publicly traded companies are technology companies Today, more venture capital funds compete for investments in startups in a more difficult environment. As a result, funds are investing in higher valuations with lower returns. The abundance of capital has shifted the ve

Welcome to the 11th Network Effects Newsletter. For most of its history, VC was a game of scarcity: scarce capital, scarce founders, scarce information. Today, capital is abundant. Founders are everywhere. AI compresses time and cost. The rules have changed, and the best firms are adapting. Today, we’re exploring the quiet evolution of the venture capital industry, where VC firms… Are expanding through buyouts Are restructuring their fund offerings Are targeting a new LP base beyond institutional investors Let’s Dive in In 1980, there were only 50 venture funds. Today, there are ~3,000 VC fund