How will venture capital change in the next decade?

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JASON LEMKIN

I think … not too much in the “middle” — Series A, B and C.  But the decade after that will see huge change from the seeds planted the past ten years and the coming ten.

Funds last 10+ years.  And just this quarter, Accel, Bessemer, Sequoia, Lightspeed, etc. etc. have all raised billions in funds that will, for the most part, be run as they have in the past.  For the most part.

But …

  • But founders have changed.  There are so many more great founders.  Technology has enabled more founders to get traction quicker, soon, for less capital.  Not just in software, but now in hardware and other segments as well.
  • The faster founders get to traction, the more control they have.  This leads to more and more founder power.
  • The more founders have power, the more platforms matters.  See Ycombinator, Social+Capital, etc.
  • More and more new brands are created in VC for early stage investing at least.
  • The more capital efficient companies are, the more micro-funds, domain-specialized funds, and niche-focused funds can be supported.
  • The more capital into the asset class as a whole, the more late-stage funding is being remade, fairly rapidly.  As well as angel investing at the start, e.g. AngelList, etc.

However … classic “Series A-B” VC … seems to, for the next ten years, likely to be done pretty much the same way.
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Published on March 25, 2016
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