Are traditional venture firms losing power to individual, distribution-led investors?

Harry Stebbings · Oct 16, 2024

Venture capital has moved from a boutique industry to a commoditized asset class

44:10 20VC: Why Founder Mode is Dangerous & Could Encourage Bad Behaviour | Why Fundraising is a Waste of Time & OKRs are BS | Why Angel Investing is Bad for Founders to Do and the VC Model is on it's Last Legs with Zach Perret @ Plaid

Harry Stebbings · Mar 28, 2025

Venture has moved from a boutique high-margin community to a commoditized low-margin industry

51:04 20VC: Why Traditional VC is Broken: How VCs Learned Nothing from 2021 | Why LPs are More Important than Founders & Advice to Emerging Managers | Bull Case for Bytedance & Why TikTok's Ban Doesn't Matter with Mitchell Green, Lead Edge Capital

Nabeel Hyatt · Apr 4, 2025 · hedged

Sequoia under Doug Leone is being run as if venture has become a low-margin commoditized industry, while trying to keep the rest of the firm compact

15:33 20VC: Why To Win in AI, Investors Need to Change Their Approach | Why VC is Run by Principals and Associates and is a Broken System | The Bull Case for Anthropic & Whether Deepseek Changes Their Strategy with Nabeel Hyatt @ Spark Capital

Taavet Hinrikus · Apr 28, 2025

The claim that venture has become a commoditized high-volume industry is partly true but has to be unpacked by segment: large late-stage checks, high-speed early stage, and backing the most ambitious founders are different businesses on different trajectories

Different parts of the venture ecosystem are going through different journeys

Scope: accepts the commoditization read 'rings a bell' in parts

6:07 20VC: VCs are Spreadsheet Monkeys and are Commoditised | Why Fees and Carry Misalign GPs and LPs | Why Founders Will Realise Multi-Stage Funds Damage Seed Rounds | Why We Need European Sovereignty More Than Ever with Taavet Hinrikus

Harry Stebbings · Nov 21, 2025

Venture has been completely commoditized and is essentially Wall Street now

70:30 20VC: Max Altman on The New Seed War: Can Anyone Compete with Sequoia and a16z | Leaving $2BN on the Table with Reddit | Lessons from Backing Rippling at $25M Post | Why Climate Tech is a Mirage and Disaster

Jude Gomila · Feb 11, 2020 · hedged

Venture will barbell: a few consolidated full-stack traditional VCs survive while the rest fall apart, alongside deep vertical specialists and a swarm of individuals who can fund companies, even doing Series As

Both extremes of the board win — giant full-service quality on one side, highly creative networked individuals on the other

Scope: forward-looking prediction

40:07 20VC: Lessons from 150 Angel Investments into the likes of Carta, Gusto, Airtable and Superhuman, Creating Algorithms and Models For Investing At Seed & Why Younger Investors Have An Advantage When It Comes To Finding Deals Early with Jude Gomila, Angel I

Sahil Bloom · Feb 25, 2022

Venture is forming a barbell: brand-name mega-firms on one end and small-check individual investors with a specific value lever on the other, with the middle tier squeezed

Top firms have self-perpetuating cachet that scares off competitors' funding, while small differentiated investors can get into any deal and deliver a concrete lever like distribution or performance marketing

13:07 20VC Exclusive: Sahil Bloom on Raising his Debut Venture Fund (SRB Ventures), Why Traditional Venture Firms Are Going to Lose and How Sahil Built a Twitter Audience to 500K+ in 18 Months

Nick Chirls · Sep 6, 2024

The existence of the big bank-like venture firms is what creates the opportunity for firms like Asylum, just as A24 could only exist as an alternative to the massive Hollywood studios.

A24 won by giving artists full creative control, having a clear sense of taste, and treating artists like humans in contrast to the big studios — the same alternative can be offered to founders in venture.

Scope: Nick says he is grateful for the big banks and doesn't want them to disappear

21:51 20VC: Why VC is a Ponzi Scheme Today | Why Most VCs are Bankers | Why Big VCs Ruin Startups | Why Incentives in VC are Broken | Why American Dynamism is a Tool for VCs to Raise Money with Nick Chirls, Asylum Ventures

Oren Zeev · Feb 2, 2026

Venture is bifurcating: you must either be a large platform or a differentiated boutique/solo GP, and undifferentiated mid-sized partnerships are in trouble

A traditional five-to-six person partnership is neither agile and personal like a solo GP nor able to win the very best deals like Sequoia — it still feels corporate to founders while lacking platform advantages

Scope: 90% agreement; exception for firms with an amazing brand or deep expertise in a specific area

31:18 20VC: 50% of Funds Will Go Out of Business | Why Growth Expectations Today are BS and Will Not Last | Why Oren Zeev Takes $0 Management Fees But 30% Carry | Why GPs Should Not Tell LPs Their Strategy

Sarah Guo · Apr 28, 2023

Sequoia is the multi-stage firm worth buying

It has executed really well as the incumbent big dog and built an impressive culture over time

34:09 20VC: In AI Who Wins? Startups or Incumbents? What Happens to Wealth Inequality? Why Will $10BN+ Companies Only Have 10 People | Why Defensibility in Startups is BS & Speed is Everything? Why Large Groups Worsen Decision-Making with Sarah Guo

Lucas Swisher · Feb 23, 2026

Benchmark's enduring strength is its ability to reinvent itself.

He points to their hiring of new talent, including his old analyst Ev.

58:30 20VC: Inside Coatue's $70BN Machine: Why Price Matters Least | Why Mega Markets are the Most Important | How to Assess Durability of Revenue and Margins in AI with Lucas Swisher

Harry Stebbings · Feb 23, 2026

The narrative that Benchmark is finished is wrong — their portfolio from this era is outstanding and any investor would take those companies.

Fireworks, Legora, Mistral and Sierra are all in the portfolio.

58:40 20VC: Inside Coatue's $70BN Machine: Why Price Matters Least | Why Mega Markets are the Most Important | How to Assess Durability of Revenue and Margins in AI with Lucas Swisher

Josh Browder · May 18, 2026

In private markets there is no insider information, so deep personal relationships with founders are the source of conviction and positive selection

Being close friends with founders — speaking at 2am — lets you tell whether the business is real, and being perceived as a founder rather than a professional investor is a unique edge

50:39 20VC: Turning Peter Thiel's $100K into $10M Angel Portfolio | The One Man Accelerator at The Four Seasons | Why VCs Can Be Sharks and What Founders Need to Know | Why Stocks and Cash are BS and You Should Invest in Land with Josh Browder

Fred Turner · Jul 18, 2026

He invests almost exclusively in companies founded by people he knows personally

Scope: results so far are mixed and mostly too early to tell

69:35 20VC: $5BN in Revenue, 7 to 7,000 Employees in 9 Months, 206,000 Tests in a Single Day: The Craziest Story in Startups: Curative with Fred Turner

Harry Stebbings · Feb 25, 2022

Traditional venture isn't dying but its power and influence will shrink — firms taking 15% of a company are gone, replaced by splitting ownership roughly evenly with content- and distribution-led investors

New-style investors bring distribution, content and brand, while traditional firms still bring company structuring, scaling between phases and exec hiring that content founders don't have time for

Scope: traditional firms retain real value in structuring, scaling and hiring

15:54 20VC Exclusive: Sahil Bloom on Raising his Debut Venture Fund (SRB Ventures), Why Traditional Venture Firms Are Going to Lose and How Sahil Built a Twitter Audience to 500K+ in 18 Months

Sahil Bloom · Feb 25, 2022

Traditional venture funds compete with the big crossover funds by adding value and finding their edge as a true partner to founders

Capital itself is a commodity, so differentiation has to come from value-add

37:47 20VC Exclusive: Sahil Bloom on Raising his Debut Venture Fund (SRB Ventures), Why Traditional Venture Firms Are Going to Lose and How Sahil Built a Twitter Audience to 500K+ in 18 Months

Sahil Bloom · Feb 25, 2022

Venture isn't dying; it is becoming radically distributed, with capital flowing out of a small set of centralized firms into many different hands

The landscape went from a handful of original firms, to firms descended from them, to a tipping point where capital is spread across many individual allocators

Scope: explicit recharacterization of his earlier 'dying' framing

16:32 20VC Exclusive: Sahil Bloom on Raising his Debut Venture Fund (SRB Ventures), Why Traditional Venture Firms Are Going to Lose and How Sahil Built a Twitter Audience to 500K+ in 18 Months

Chris Dixon · Mar 27, 2024

The internet unbundled brand in venture capital: where firm names once carried all the weight and you had to join a big firm to raise money, individuals can now build their own brand and raise independently.

When he started, firms like Sequoia, Kleiner, Benchmark and Accel were black boxes — there was no blogging or writing about how term sheets worked — so the firm name was the asset; changed information flow drove the barbell structure and the rise of seed funds.

Scope: he doesn't think about venture as a single category

39:18 20VC: a16z's Chris Dixon on Who Will Win the Next Generation of Venture, The Two Ways to Make Great Venture Investments and Find the Best Entrepreneurs & Why AI Will Strengthen the Position of the Incumbents Moving Forward

Harry Stebbings · Oct 21, 2022

Power in venture is migrating from firms to individual partners, so partner-level differentiation will change far faster and more significantly than firm-level differentiation

Founders are now choosing partners rather than firms, as shown by individuals building strong personal brands

10:07 Power is migrating from firms to individual partners faster than firm level differentiation changes

Kyle Harrison · Oct 21, 2022

Venture firm structure has evolved through three phases: monolithic brands, then fiefdoms led by a single partner, and now 'renegades' where individuals define themselves

Partners have been progressively abstracted out from the institution, from bank-like monoliths to crypto arms and geographic arms with named leaders to individuals

10:38 Venture firm structure evolved from monolithic brands through partner fiefdoms to individual renegades

Mike Mignano · Jul 6, 2026

Factorial's model of arming real angel investors with additional fund capital is a genuine innovation in venture structure

These are angels rather than scouts, so the fund builds a network of high-quality investors like Clem from Hugging Face while monetizing through carry

59:55 Funds should arm independent angels with capital

Harry Stebbings · May 18, 2026

Founder-investors become an aspirational check in a way no traditional venture firm can match, especially in hardware and robotics

Robotics founders specifically ask to meet Lachy Groom, which doesn't happen for other venture firms

73:44 Founder investors are the aspirational check firms cannot match

Nabeel Hyatt · Apr 4, 2025

Looking back, this era will not be seen as one where venture became low-margin and commoditized

Most firms are executing strategies that are not effective for this market, so on any given deal you are only competing with a small subsegment of investors

16:09 Commoditization thesis is wrong most firms use ineffective strategies leaving room to win

Gokul Rajaram · Mar 16, 2026

There will be more mega fund spinouts, returning venture to the small-partnership model of twenty or thirty years ago, though the wave has a limit

Mega funds keep training new waves of investors who then realize being a mid-level partner there isn't what it's cracked up to be

69:12 Mega fund spinouts return venture to small partnerships