378 Stale VCs? VC should give back too

  • According to The Funded, 378 Venture Capital investment firms have not made any recent investments. That would mean roughly 1/3rd of all VC firms since the beginning of 2000 have seized to invest, possibly because they have not raised a new fund. And that means the collective investment from these firms into startups has received improper innovation arbitrage, as it has not produced cumulative returns to build the commitment for a new fund. As an entrepreneur please verify your prospective investor is not on this list, to avoid being tagged as a false negative (by a negative). Expect this list to grow some more, so bookmark the source page.
  • Oaktree Capital Management hands $3B of its distressed fund back to its Limited Partners, asking them to re-up for a renewed strategy to better match new economies. We applaud their integrity. Venture Capital investors should do the same, given minus 4.6% average returns and give all the unallocated moneys back to LPs. With fewer than 35 VCs making any consistent money for LPs, I bet fewer than 5% of current VCs will be able to raise a new fund with a new, modern investment strategy. Because they just don’t know.


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