Should venture funds adopt evergreen structures rather than traditional closed-end funds?

David Frankel · Oct 14, 2024

Sequoia's evergreen fund structure was strategically sound; only the timing of its launch was unfortunate

The theory was right and they executed on it, but it required extraordinary companies and launched into the wrong market moment

Scope: conditional on the underlying companies being extraordinary

39:54 20VC: Investing Lessons from FC Seeding Uber, Airtable and Coupang | Why Pro Rata is the Original Sin in VC | Why Liquidity Has Died in 2024 | Why LPs are Pissed with VCs | The Hard Truth About Seed Fund Economics with David Frankel @ Founder Collective

Harry Stebbings · Oct 14, 2024

Sequoia is the only firm that could execute an evergreen fund structure

40:05 20VC: Investing Lessons from FC Seeding Uber, Airtable and Coupang | Why Pro Rata is the Original Sin in VC | Why Liquidity Has Died in 2024 | Why LPs are Pissed with VCs | The Hard Truth About Seed Fund Economics with David Frankel @ Founder Collective

Larry Aschebrook · Jun 16, 2025

Sequoia will make money on Instacart in the long run and its business model is excellent, but there is only one evergreen structure he would ever invest in

Sequoia bought along the way rather than at a single price, and their partners are strong

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Byron Deeter · Aug 25, 2025

Evergreen fund structures have real merits but are hard to run and not something Bessemer will pursue in full

Incentives to manage all the way through are a positive, but public market management is a different beast, the economics should be different, and in a DPI-focused world most LPs get paid to allocate and want capital back

54:52 Evergreen structures have merit but are hard to run so firms avoid full adoption

Peter Singlehurst · Mar 19, 2025

He overestimated how important permanent capital vehicles were as a source of edge; the firm can do a perfectly good job for clients in traditional fund structures too

Many clients wanted exposure to these private companies but couldn't access permanent capital vehicles, and the structure turned out not to be core to their actual advantages

5:46 Permanent capital vehicles were not a core source of edge traditional funds suffice

Larry Aschebrook · Jun 16, 2025

The venture industry's proliferation of evergreen structures, interval funds and quasi-liquid private strategies is a symptom of a fundamentally broken fund-life model that nobody wants to admit is broken

The industry is searching for solutions to the fund life problem precisely because it is broken, but won't say so out loud

88:02 Proliferation of evergreen and interval structures reveals a broken fund life model