The changing nature of venture capital by Paul Asel

TL;DR - Paul Asel predicts that venture capital will become more consolidated, featuring more large firms and fewer closely-held partnerships as a result of increasing capital intensity.

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Tags - notable investors, future vc

Questions addressed:

  • How is venture capital changing and how are the major players leading the way?

Summary:

  • Venture capital firms are becoming larger and more specialized, rather than smaller shops composed of just a few partners.
  • Firms like SoftBank, Andreessen Horowitz, Sequoia Capital, GGV, and Lightspeed are leading the way with both larger and more specialized funds.
  • Investment banking and private equity firms offer a potential road map for VC.
    • Small partnerships became large, complex firms as the search for more capital led to a need for more corporate structure.
  • More capital is becoming necessary for VC as startups increasingly seek to disrupt rather than enable.
  • The VC world is also likely to become more consolidated, although this is unlikely to extend to smaller, more specialized seed and early-stage firms.

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