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The Venture Model Fracture: What Happens When Capital Gets Too Big to Take Bets

  • Venture capital is undergoing a fracture due to scale, liquidity pressure, and excessive capital accumulation.
  • 1. The Platform VC model involves large firms like Lightspeed and Sequoia adapting to the need for more unicorns per fund, blurring the lines between venture capital and private equity.
  • 2. The Studio Model focuses on scaling conviction and disciplined investing, as seen in firms like AI Fund and Bending Spoons.
  • 3. Some smaller VC firms continue to support founders from the early stages, maintaining the traditional venture capital approach.
  • 4. The fracture in venture capital is driven by capital outpacing outcomes, leading to changes in fund sizes and exit strategies that demand a shift in management approaches.

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