The Brutal Truth of the VC Industry: Why Most Funds Haven't Returned the Principal After 9 Years?
**VC's Harsh Reality: Why Most Funds Haven't Returned Capital After 9 Years**
This article uses hard data to dissect key trends in venture capital and AI spending. It reveals that large, established VC firms are heavily clustered in similar AI investments, while emerging managers are more likely to back unconventional companies. Data shows that of scored seed deals, emerging funds invested 24.7% in "outlier" startups versus only 11.5% for giant funds, largely due to specialized funds with different mandates.
A critical finding from Carta data exposes that most VC funds fail to return investors' capital even after nine years. Median funds from 2017 have only returned $0.37 for every dollar invested. This creates pressure for funds nearing their lifecycle end, which can influence their advice to portfolio companies regarding exits or follow-on funding—a dynamic founders must understand.
The analysis of AI spending identifies a crucial, often overlooked market: the middle layer between basic and frontier models, which accounts for ~40% of enterprise AI spend. Price wars are intense here due to lab competition, open-source models, and fine-tuning. The article advises startups to categorize AI spending into three lines—salary replacement (benchmarked against labor costs), productivity tools (evaluated by usage), and product-integrated costs (focused on margins)—to spend effectively.
Finally, it highlights a decline in rigorous due diligence for deep tech (e.g., quantum computing), where large deal sizes, reliance on lead investor reputations, and herd behavior often replace independent technical validation, risking a repeat of historical investment bubbles.
marsbit1 saat önce