Venture capitalists: You're blowing it

Editor's note: This piece first appeared in Dan's Pro Rata newsletter, which dives into the world of dealmaking. Subscribe here. Dear venture capitalists, I've been covering your industry for over two decades, through booms and busts and back again. If there is to be another two decades, you'd better change your behavior. And quick. The basic VC model is cyclical. Raise money, invest that money, exit via IPOs or strategic sales, and then use those exits to raise more money. But it doesn't work if you stop exiting companies. A whopping 37% of "unicorns" are being held for at least nine years by VC funds, including 13% that are past the 12-year mark, per PitchBook and the NVCA. Remember when you told LPs that your fund had a 10-year distribution period? Want to irritate an LP? Ask them about all the VC fund extensions and continuation vehicles they're getting asked to approve. In short, you're blowing it. Go deeper: Global dealmaking slows after year-end uptick Illustration: Sarah Grillo

Editor's note: This piece first appeared in Dan's Pro Rata newsletter, which dives into the world of dealmaking. Subscribe here. Dear venture capitalists, I've been covering your industry for over two decades, through booms and busts and back again. If there is to be another two decades, you'd better change your behavior. And quick. The basic VC model is cyclical. Raise money, invest that money, exit via IPOs or strategic sales, and then use those exits to raise more money. But it doesn't work if you stop exiting companies. A whopping 37% of "unicorns" are being held for at least nine years by