“The major companies have become much larger,” said Alexander Lazaro, the administrative partner of Fluent Ventures. “At the same time, there was an explosion of (small) investment capital companies … so I think we saw the rise of specialization and the rise of the regional character in technology.”
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Investment capital industry He was facing a great deal of chaos at the upper level Reports Among the many executives of the highest level who leave old companies.
In Silicon Valley, it includes some prominent departure Miller From Sikoya and Jedam Krishnan From Andressen Horowitz. On the other side of the world, two senior executives I want you Anand Shailash Lakhani announced its exits from Peak XV Partners – Sequoia Captagality & SEA – in February.
Its rotation is common among young people in this industry, but it was rare to see the higher investment capital partners leave their jobs, because these high -level situations are often more profitable and difficult to reach, according to those familiar with the industry.
I think we have seen a major change in the sea over the past decade, which has shifted the adventure (the capital industry) into asset management on a wider scale, and I think this is actually the essence of this issue.
Rick Zulu
Founder and administrative partner, equal projects
“More departure is happening,” said Rick Zolo, founder and administrative partner of Equal Ventures. CNBC.
CNBC Take a look at some of the reasons behind them.
Moving for success
The reasons for this departure include a vision by some investors that decision -making in many large companies is slow, and the funds focus on increasing the funds they run instead of working with the promising founders.
Some investors in this camp also say they benefit from the major changes in the industry, leaving the flaws of large companies for the benefits of smaller companies.
Over the past decade, the investment capital industry has turned with great older companies in the world. In 2024, nine investment capital companies raised $ 35 billion, or 50 % of the total capital amount collected by American funds, according to it. Pitchbook.
“I think we have seen a major change in the sea over the past decade, which has shifted the adventure (the capital industry) into a broader asset management, and I think this is actually the essence of this issue,” Zolo said.
“(Investment capital companies) are now expanding to become more similar … Blackstone or Goldman Sachs … and this leads to some cultural repulsion between people who want to be pure project capital and people who want to become asset management companies.”
As old companies grow, some big partners say they brought them away from their original passion for investment capital.
“The major companies have become much larger,” said Alexander Lazaro, the administrative partner of Fluent Ventures. “At the same time, there was an explosion of (small) investment capital companies … so I think we saw the rise of specialization and the rise of the regional character in technology.”
On the one hand, with more money focusing on a few elite companies in Silicon Valley, some founding investors chose to branch and start their own box as they can have more control over their decisions, and invest in things that have a high conviction, as Lazaro said.
He said that with the rise of technology platforms such as Angellist and Carta, it became easier for individuals to start their investment capital. He added that the limited partners – or those who invest in investment capital funds – have also become “more comfortable” in individual managers today.
“There is a group of amazing investment capital owners in some of these very large companies that have achieved tremendous success, who now decide that they do not want to be the managers of assets … they do not want to deal with bureaucracy or corporate structures.” “They just want to return to the basics.”
Bilal Zuberi is one of them: he is Declare His departure from Lux Capital in December, after he worked as a general partner in the company for about 12 years. Today, its project fund is called Red Glass Ventures, which focuses on investing in early companies.
Then all sudden music chairs stopped. The public subscription market has been closed, exit (gold), and integration and purchases decreased, so I think a lot of LPS (has a lot of money on a relative basis in the category, (and) is not enough liquidity to return.
Alexander Lazaro
Administrative partner, Fluent Ventures
“When you are a very big box, it becomes very difficult for the major partners … focusing on the early stage,” he said. The startups of seeds and chain A often are left for the younger team members, which is “not the best producer of the founders,” Zuberi told CNBC.
He added: “The founders want to work with experienced large investors who can share the seats of the Board of Directors … and provide real advice … and frankly, it is difficult to do this in a larger company.” “If I can write premature convictions, I will have a high ownership, and if … companies work well, this is true to return alpha.”
Moving from failure
But not all departure is voluntary.
“There are many people who are simply expelled from these companies with great silence … The funeral award is to not make the general partner of these companies to become a young manager and serve new companies,” Zolo said.
The vision of the returns on investment capital investments inside the Silicon Valley was more difficult, as the industry was suffering from a large contraction, according to the insiders in the industry.
That was largely nourished by Useful interest policy It is implemented by the US Federal Reserve, the last of which is during the epidemic in 2020 – setting rates near zero – which made investor borrowing cheap and motivating to publish more money in startups and other most dangerous assets.
As a result, the ecosystem witnessed a huge increase in investment investments during the Covid-19 years, but when interest rates rise in 2022Investors became more cautious and realized that some startups may be Exaggerated.
“I think one of the challenges that have occurred over the past two years of LPS (limited partners) … is that the speed of revenues was much higher in 2021, through many public subscriptions. People got their money,” Lazarro said.
“All sudden music chairs stopped,” Lazaro added.
Impact on governor companies
The unintended result often for the partners who leave their money is that their portfolios can be affected. How does the departure of this investment capital affect startups? The short answer is that it depends.
The major partners often occupy the seats of the Board of Directors in their governorate companies and have long become guides for the founders, but this was not the case for some companies, according to the insiders in the industry.
Zolo said: “At least three of our conservative companies had at least one member of the Board of Directors, meaning that this person has left his company, and we have many companies that lost many (members of the Board of Directors),” said Zolo.
“I think the best way to do this is to think about moving with the wallet, the executive director and the founding team,” Lazaro said. “It is important that the company does not become an orphan within the VC box and has continuity.”
The departures can negatively affect the governor’s companies when the startup had a strong champion in the board of directors, which also had a lot of influence in their company. Those familiar with those familiar with the industry said when these partners are replaced by a more young person, they can disrupt the meetings of the Board of Directors and make decisions of the company.
In addition, companies that look forward to raising more money can be affected by a follow-up tour-when the current investor investizes the company-when its original champion is no longer present to help with ventilation within the company.
Startup maturity can also play a role in how the founders are affected.
Aaron Tan, co -founder and CEO of Caro.
“Most (the partners) are not exactly operational,” Tan said, so the founders may not depend on them to obtain guidance in the first place.
While early companies can be affected because they usually need more directives than their partners or members of the Board of Directors, companies at the next stage have more experienced founders, and many other members of the Board of Directors often depend on Tan.
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