Should a successful investor scale up fund size over time or stay deliberately small?

Sahil Bloom · Feb 25, 2022 · hedged

He will stay small and keep writing small checks rather than raise progressively larger funds, because you can make plenty of money and back world-changing companies without a $100M fund

His goal is exceptional returns and access to the best companies, which doesn't require fund size; the model he's building is more like a media personality with an investment fund

Scope: 'I'd be surprised if I did' raise a $100M fund; admits he has no grand strategy

17:42 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

Mo Koyfman · Aug 8, 2022

Larger early-stage funds systematically produce lesser returns than smaller ones

Not just because bigger pools are harder to return — the real cause is the absence of constraints; small funds force considered choices about how many deals, which deals, and how much to invest, and that discipline separates a good fund from a great one

Scope: specific to early-stage investing, not investment management broadly

12:45 20VC: Investing Lessons from Fred Wilson and Why Small Funds Outperform Large Funds | Why the Secret to Winning in Venture is Splitting Deals |Learnings From the Biggest Hits and Biggest Losses | Why Anyone That Always Does Their Pro-Rata is Wrong with Mo

Semil Shah · Nov 21, 2022

Raising a $100-150M fund would change the collaboration layer of how Haystack works, which would cascade into changed deal flow and company operations, risking the magic of meeting entrepreneurs early

The current model produces DPI, IPOs on paper and early access; it is better to raise the next small fund and go again than to risk that for more money

15:38 20VC: Semil Shah on The Biggest Mistakes VCs and LPs Made Over the Last 24 Months, Why LP Churn is Coming, Core Lessons on Scaling from $1M Haystack Fund I to Today and How To Find, Win and Manage LPs as an Emerging Manager

Jake Gibson · Jul 14, 2023

Benchmark is the best Series A firm to back because of its discipline in keeping fund size small

In the spirit of keeping fund sizes small, it's hard to beat Benchmark

Scope: Accel also does a really good job

43:06 20VC: Why Fund Sizes Should Be Smaller, Should Founders Also Have Their Own Funds, Is Emerging Markets Investing Gone, Is Fintech Investing Dead & Who Will Be The Winners and Losers in VC in the Next 10 Years with Sheel Mohnot, Co-Founder @ BTV

Marcelo Claure · Jul 31, 2023

Being the biggest fund doesn't make you the best, so ~$500M is the right starting size rather than raising more

Scope: a starting point; more capital may come if they deliver

16:11 20VC: Marcelo Claure & Shu Nyatta on Lessons from Investing $7.5BN at Softbank & Why Dumb Money has Gone, Why "LATAM is Under Construction" and the Next 10 Years Will Be the Best & Investing Lessons from Missing Nubank & OpenAI & Investing in FTX

Nikhil Basu Trivedi · Sep 6, 2023

Small venture funds outperform bigger funds on average

It is incredibly difficult to return five times net on a billion-dollar-plus fund — you'd need at least one Canva-scale outcome at 10% ownership every fund cycle, and there are very few such companies; historically almost no funds that size have done it

Scope: on average; admits bias as GP of a $175M first fund

10:00 20VC: Why Small Funds Outperform Large Funds & AUM is a Vanity Metric | Why 99% of Investments in AI Startups Will Go To Zero | Being a "Traction First" VC & Investing Lessons from Investing in Canva and Missing Figma with Nikhil Basu-Trivedi

Kevin Ryan · Apr 10, 2024

The venture business he is in does not scale infinitely, so accumulating assets is the wrong goal — he doesn't want to run a $2BN fund.

The model works at its current size; any growth should come from adding verticals like deep tech, not from gathering assets.

Scope: may raise a somewhat larger fund to add verticals; wants the deep tech practice bigger

60:09 20VC: Are the Best CEOs the Best Fundraisers, Are the Best Founders Insiders or Outsiders to a Problem, Why Ownership Should Not Be a Focus in VC & The Biggest Lessons Scaling MongoDB to $26BN Market Cap with Kevin Ryan, Founder @ AlleyCorp

Danny Rimer · Jun 17, 2024

Index's partnership and fund sizes should stay roughly the same size a decade from now, with better returns coming from a higher caliber of partner rather than from scale

Better returns come from hiring better people who learn from better investors, seeing better companies, and being better at sourcing, winning, operating and exiting — not from growing headcount or fund size

Scope: stated as his ideal-world hope for the firm

69:09 20VC: Index's Danny Rimer on Investing Lessons from Hits like Figma, Discord and Etsy to Missing Snapchat, Airbnb, Facebook & Spotify | Why Valuation is a Trap and Market Sizing, Signalling and Sector/Geo-Specific Funds are all Noise

Harry Stebbings · Oct 21, 2024

On a pure multiples basis, the best bets are Cyberstarts at seed, Kleiner Perkins or Benchmark at Series A, because of their smaller fund sizes

Smaller fund size drives multiple returns

Scope: multiples basis only, not dollars returned

54:20 20VC: Kleiner Perkins' Mamoon Hamid on Investing Lessons from Leading Rounds in Figma, Slack and Rippling | Lessons Building a Generational Defining Firm with Kleiner Perkins | AI: Where Value Accrues, Startups vs Incumbents & Scaling Laws

Cem Sertoglu · Nov 20, 2024

USV and Benchmark are the most admirable firms because they have kept discipline around what they think they do better than anyone else, and their results show it

Sustained strategic discipline shows up in returns

56:18 20VC: Turning $16.5M into $2.1BN; Lessons from the Greatest Venture Investment in European History: UiPath | Why VC is Not Being Commoditised | Why Price Does Not Matter | Lessons on Loss Ratio, Selling and Signalling with Cem Sertoglu

Shervin Pishevar · Jan 13, 2025

Emerging venture funds like ours are lucky in their timing rather than too small to matter

Investors with great instincts about people, companies and trends will always get into the deals, and the coming AI and quantum wave will produce trillion-dollar companies to partner with

Scope: depends on resilience, grit and authentic relationships with great founders

56:05 20VC: Shervin Pishevar on The Epic Uber War and What Really Happened in the Firing of Travis Kalanick | Raising $15BN to Win China | Why The Traditional Venture Capital Model is Dead | The Future of Quantum and How We Will Cure All Diseases in 10 Years

Mitchell Green · Mar 28, 2025

Managers who deliberately keep fund sizes small are the ones who sustain strong returns across generations

Spectrum Equity has stayed at $2-2.5bn funds forever, Benchmark has kept funds small across three generations and still puts up good numbers, and First Round and Floodgate have stayed small

49:47 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

Spark's refusal to scale into a mega-fund made the firm poorly suited to the 2021 B2B SaaS industrialization era but well suited to the current one

Spark's DNA and values were fixed by the early Web 2.0 / mobile era, where metrics were unknown and the market was wide open; staying a six-to-seven-person partnership where everyone writes checks and does service work matched that world, not the industrialized SaaS world

Scope: admits they could easily have raised $5B and tripled the team

14:06 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

Miles Dieffenbach · Aug 4, 2025

Index Ventures is the single best-performing venture firm at scale, and deserves credit for refusing to grow its fund size

Their performance over the last twelve months in a bad market is unbelievable — largest shareholder in Figma, Dream Games and Wiz, second largest in Scale AI and Revolut — and despite being able to raise as much as they want they actually reduced their latest fund size after 2021, reflecting the most performance-driven culture he sees

41:43 20VC: Inside Carnegie Mellon's $4BN Endowment | Why 90% of LPs Shouldn't Invest in VC | The $140BN Problem with Multi-Stage Funds | The Hidden Math Behind DPI, TVPI, and Illiquidity with Miles Dieffenbach

Martin Mignot · Aug 11, 2025

USV and Fred Wilson are the most admirable firm in venture, including their against-the-grain decision to stay small

Fred Wilson's blog educated the industry on how venture and entrepreneurship work, showed sophistication in explaining business models and picking themes early; USV operate in a uniquely collegial way and have deliberately gone against the industry current

Scope: framed as historical inspiration — Fred Wilson's blog is why he joined venture

63:26 20VC: Figma, Scale, Wiz: Inside Index's Decacorn Factory | Decision-Making, Investment Process, Biggest Lessons, Biggest Misses | Why Gross Margin is a Fallacy at Seed | Never Turn Down a Deal on Price with Martin Mignot, Partner @ Index Ventures

Everett Randle · Nov 10, 2025 · hedged

Benchmark has retained exceptional network access and relationships with the founders this AI wave looks up to despite not participating in mega rounds

They partnered with the cultural touchstone founders of the era — Bret Taylor as the godfather of AI apps and Brendan at Mercor for the cracked young AI infrastructure teams

Scope: at least thus far; remains an ongoing question if billion-dollar raises become the only way to build these relationships

36:56 20VC: Benchmark's Newest General Partner Ev Randle on Why Margins Matter Less in AI | Why Mega Funds Will Not Produce Good Returns | OpenAI vs Anthropic: What Happens and Who Wins Coding | Investing Lessons from Peter Thiel and Mamoon Hamid

Oren Zeev · Feb 2, 2026

His funds got too large in 2021-2022; a fund around $250M or less is better sized and more conducive to great returns than the $500M+ vehicles he raised

He was reacting to a market with frequent, large rounds and overdid it; he cut fund size by about half in 2024 and wants the next fund smaller still

Scope: one of the two large funds will still be good

29:43 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

Mike Mignano · Jul 6, 2026

A venture firm can be very successful with a small fund; the right answer depends on what you're optimizing for and your constraints, not on chasing the largest outcomes

USV has always run small funds and that's the game it chooses to play; a $10bn fund would be playing a different game

Scope: may not hold for very large funds

41:26 20VC: Why Now is the Time for the Application Layer | Why OpenAI & Anthropic Won't Win the App Layer | Why Startups Should be TokenMaxxing | Why VCs Should Reduce Weighting on Price & Ownership in an Age of AI with Mike Mignano, USV

Mike Mignano · Jul 6, 2026

Smaller funds have more downside protection than large funds because a $275M fund is far easier to multiply than several billion dollars at the same ownership levels

The absolute dollars needed to return the fund scale with fund size while ownership stays similar

Scope: you should still only back companies in large markets

44:34 20VC: Why Now is the Time for the Application Layer | Why OpenAI & Anthropic Won't Win the App Layer | Why Startups Should be TokenMaxxing | Why VCs Should Reduce Weighting on Price & Ownership in an Age of AI with Mike Mignano, USV

Matt Murphy · Jul 27, 2026 · hedged

The constraint on late-stage participation is fund size rather than valuation discipline — he'd rather be in the most amazing company than out of it

Menlo doesn't have and doesn't want a $10-20B fund, so beyond some quantum of capital the round is for someone else

Scope: Menlo is full-stack and can take big concentrated positions with co-investing LPs

10:09 20VC: Leading Anthropic's First Ever Round | Will Open Source Threaten Anthropic's Business | Do Margins Matter in a World of AI | Why Triple, Triple, Double, Double is Not Good Enough Today | Why Series A is Hard Today with Matt Murphy @ Menlo

Hunter Walk · Jan 30, 2023

Fund size is strategy: a larger fund implicitly forces you to raise your ownership target to the point where you can no longer be collaborative, and makes you impatient for the next markup instead of patient about company building

Once you have to return the fund you do the math on what outcome and ownership that requires, and every downstream behaviour follows from it

Scope: credits the framing to Mike Maples

28:53 20VC: Homebrew's Hunter Walk and Satya Patel on Why $100M is Not Enough To Execute a Seed Strategy Today | Why They Decided not to Raise New External Funds | Where Are We in the Cycle & What is Truly F***** | Why Founders Should Take Secondaries Earlier

Sarah Guo · Apr 28, 2023

Structure and incentives determine a venture firm's strategy: big multi-stage funds with big fees are pushed to hire for coverage, do less judgment work, or write larger checks

Investing billions a few million at a time is not feasible, so there are only a few vectors of attack

26:42 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

Mike Maples · Jan 6, 2025

Floodgate performed better as a $150M fund than as a $75M fund, but that difference was not really due to fund size; more generally, fund size is your strategy because the power law means one investment must return the bulk of the fund

With 22 boards your phone is always blowing up with something broken, so you lose the sharpness of mind to be awake to the possibility of something like Pinterest when it pitches you

Scope: fund size was still part of what they changed

4:52 20VC: How To Do a 10x Seed Fund in 2025 | Three Frameworks to Evaluate Startups an Founders | Lessons from Losing Billions Missing Airbnb and Pinterest & Investing Lessons from Charlie Munger with Mike Maples @ Floodgate

Hussein Kanji · Jan 20, 2025 · hedged

A venture manager has to get to the right sized fund.

Scope: says his firm no longer faces this trade-off

37:06 20VC: Why Large Seed Rounds Increase the Chances of Success | When to Sell in Venture | Why Multi-Stage Firms Do Not Do The Work | Is Europe Totally F****** and Why AI Means London Can Compete with the US with Hussein Kanji

Byron Deeter · Aug 25, 2025

Round sizes have grown to the point where fund scale genuinely matters, so venture firms need growth capabilities to support companies all the way up

Firms must be able to keep supporting their companies through increasingly large later rounds

43:52 20VC: Do Margins Matter in AI? | Is Defensibility Gone For Good? | Is Vertical SaaS Dead in a World of AI | What SaaS Rules Are BS and No Longer Apply in a World of AI | The Future of Venture: Why Chanel vs Walmart is BS with Byron Deeter

Everett Randle · Nov 10, 2025

Conway's Law applies to venture firms: a firm invests its fund size and team structure, so strategy is dictated by AUM and headcount rather than by conviction

A $7B fund with 50 people definitively has to get into mega rounds because that's the only way to deploy a billion dollars productively in a single shot, and missing a successful mega round leaves you benchmarked poorly against peers who took it

34:04 20VC: Benchmark's Newest General Partner Ev Randle on Why Margins Matter Less in AI | Why Mega Funds Will Not Produce Good Returns | OpenAI vs Anthropic: What Happens and Who Wins Coding | Investing Lessons from Peter Thiel and Mamoon Hamid

Gokul Rajaram · Mar 16, 2026

A $200–400M fund can still successfully back vertical SaaS in 2026 and create a $10B company, even if mega funds conclude it isn't a $100B outcome.

Vertical software is no longer just SaaS — it takes over labor, so it can go after both BPO and human labor spend on top of tooling budgets, which vastly enlarges the opportunity.

Scope: requires commitment to building the whole product; especially when selling to small businesses

26:39 20VC: The 8 Moats of Enduring Software Companies: How to Analyse for Durability and Defensibility in a World of AI | Why Dropouts are "AI Maxing" the World & Remote Early-Stage Companies are Dying with Gokul Rajaram

Gokul Rajaram · Mar 16, 2026

A firm with a $10B fund is playing a fundamentally different game than a $400M fund, and trying to play the mega fund's game will make you lose.

Benchmark and Andreessen Horowitz play different games and both do well at their own game — you have to play the game you're best equipped for.

33:58 20VC: The 8 Moats of Enduring Software Companies: How to Analyse for Durability and Defensibility in a World of AI | Why Dropouts are "AI Maxing" the World & Remote Early-Stage Companies are Dying with Gokul Rajaram

Satya Patel · Jan 30, 2023

A $100M fund is a 'tweener' size for seed investing in today's market — you should either be larger or smaller

At larger scale you can write big checks and secure the ownership you need; at smaller scale you keep flexibility on check size and ownership without having to maximize both on every single investment

Scope: today's market; seed stage in particular

0:00 20VC: Homebrew's Hunter Walk and Satya Patel on Why $100M is Not Enough To Execute a Seed Strategy Today | Why They Decided not to Raise New External Funds | Where Are We in the Cycle & What is Truly F***** | Why Founders Should Take Secondaries Earlier

Satya Patel · Jan 30, 2023

In today's seed market a $100M fund is a tweener: you must either be much larger to write big checks and get winning ownership, or much smaller so check size and ownership don't have to be optimized on every deal

Large checks and ownership are needed to win the best opportunities and deliver LP-expected returns, whereas a small fund gives flexibility without needing to maximize on each investment

Scope: at the seed stage in particular

18:42 20VC: Homebrew's Hunter Walk and Satya Patel on Why $100M is Not Enough To Execute a Seed Strategy Today | Why They Decided not to Raise New External Funds | Where Are We in the Cycle & What is Truly F***** | Why Founders Should Take Secondaries Earlier

Harry Stebbings · Oct 25, 2024

A $350M fund is too small to lead Series A rounds while also doing seed, because typical Series A checks of $15M leave no diversification or room for seeds

Fifteen $15M checks consume $300M minus fees, exhausting the fund

15:03 20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry

Bucky Moore · May 5, 2025

Venture will barbell further: small dedicated specialist firms and large multistage platforms both keep rising, while mid-sized funds (roughly $500M–$2B) face an increasingly difficult uncanny valley

The emergence of trillion-dollar companies favors both extremes and squeezes the middle

Scope: conditional on trillion-dollar company outcomes continuing to play out as they appear to today; accepts Harry's $500M–$2B framing as 'fair to say'

58:48 20VC Exclusive: Why Mega Platforms Will Win in VC | Why You Cannot Do VC If You Do Not Do Pre-Seed | Why Market Sizing is BS | Where Will Foundation Models Build/Buy Apps vs Where Will They Not with Bucky Moore

Max Altman · Nov 21, 2025

Being a roughly $700M fund is the worst position in venture; you must either be a massive platform, have legacy cachet, or be a boutique with a specific offering that stays small

The middle offers neither platform power nor brand legacy nor a differentiated boutique offering

61:57 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

Harry Stebbings · Jul 6, 2026

The worst place to be in venture is a $50–100M seed fund — crushed by large funds that can lead and write big checks, yet not small enough to be collaborative.

That size sits in a difficult middle ground: too small to compete on check size and lead rounds, too big to be treated as a collaborative small player.

12:01 20VC: Why Now is the Time for the Application Layer | Why OpenAI & Anthropic Won't Win the App Layer | Why Startups Should be TokenMaxxing | Why VCs Should Reduce Weighting on Price & Ownership in an Age of AI with Mike Mignano, USV

Harry Stebbings · Jul 27, 2026

Small boutique seed funds will be the worst performing venture category of this vintage, despite being what every LP currently wants

Multi-stage firms like Menlo, Founders Fund, Benchmark, Sequoia and Accel now run very effective seed products, leaving a $50M fund writing $2M checks too big to be friendly and too small to lead

Scope: specifically San Francisco-focused sub-$100M seed-only funds

35:14 20VC: Leading Anthropic's First Ever Round | Will Open Source Threaten Anthropic's Business | Do Margins Matter in a World of AI | Why Triple, Triple, Double, Double is Not Good Enough Today | Why Series A is Hard Today with Matt Murphy @ Menlo

Harry Stebbings · Aug 8, 2026

Seed is the hardest part of the venture market, and $50–100M funds will be the worst performing vintage because they are too big to write collaborative $100–250k checks and too small to lead an $8–10M seed round.

Funds that size are stuck in a structural no-man's-land on check size

Scope: about $50–100M funds specifically

4:24 20VC: The AI Boom Will Create Enormous Roadkill: Who Wins & Loses | Why Founders Should Never Take Multi-Stage Money at Seed | Why Triple, Triple, Double, Double is Good Enough

Jason Lemkin · May 6, 2022

The traditional $50-60M seed fund model no longer works for any founder with social proof or privilege, and only still works when backing less privileged founders

the model depended on writing checks of ~2% of the fund at $3-10M pre-money valuations to get 10-20% ownership with enough diversification; valuation inflation breaks that math, which is why everyone is now raising $300-400M seed funds

Scope: still works for founders without social proof; alternative is settling for a very different model

27:49 20VC: Why the Traditional Seed Fund Model No Longer Works, Why Multi-Stage Funds Investing at Seed Bring Signaling Risk but also Less Pressure, The One Criteria All Potential Sales Hires Need to Have and The Clear Signs of 10x Sales Hires with Jason Lemki

Harry Stebbings · Oct 27, 2023

The old seed fund structure of $25-100M no longer works, because leading $3-5M rounds with ~$2.5M checks across 30 companies exhausts a $100M fund with no reserves

Diversification requires around 30 companies, and at today's round and check sizes that consumes the entire fund

16:17 20VC: The Three Types of Seed Round Today, Why Seed Has Never Been More Competitive, Why Pricing Has Never Been Higher, Why Boards at Pre-Seed Can Be Helpful & How Too Much Cash Too Soon Can Harm Companies with Ed Sim, Founder @ Boldstart

Hussein Kanji · Jan 20, 2025

The right size for a seed fund today is roughly $150-250M, up from the ~$100M that seemed right several years ago

That is the size you need to be to play the seed game well

Scope: Europe/UK seed context

35:27 20VC: Why Large Seed Rounds Increase the Chances of Success | When to Sell in Venture | Why Multi-Stage Firms Do Not Do The Work | Is Europe Totally F****** and Why AI Means London Can Compete with the US with Hussein Kanji

Hussein Kanji · Jan 20, 2025

A seed fund that wants to write $10M checks and double out of the same vehicle needs to be roughly $200–300M, not $100–125M

A $10M check is 10% of a $100M fund versus 5% of a $200M fund, and 10% concentration is a very different risk posture; without a separate opportunity vehicle you need the extra size to double down

Scope: if you have another vehicle to double down from, a smaller fund can work

45:59 20VC: Why Large Seed Rounds Increase the Chances of Success | When to Sell in Venture | Why Multi-Stage Firms Do Not Do The Work | Is Europe Totally F****** and Why AI Means London Can Compete with the US with Hussein Kanji

Wesley Chan · Aug 22, 2022

Capping fund size is a discipline mechanism: with unlimited capital you get loose and invest in lower-quality deals

There are only so many great money-making businesses, so they capped at $450M and turned away two-to-three-times oversubscription to stay picky

37:37 20VC: Why Market Always Wins Over the Founder & Why I Do Not Do Market Sizing | Why it is not the Best Time to be Investing but it is the Best Time to Have a Fund & The Type of Deals to do Today | Why The Best Founders Have 100 Year Plans with Wes Chan, C

Sarah Guo · Apr 28, 2023

A $100M fund is the right size for her strategy even though she could have raised $500M, because constraints breed discipline and creativity for investors just as they do for founders.

A small fund size is focusing — it keeps them early stage and prevents doing things that structurally don't make sense — and she believes the bulk of the AI opportunity is in companies that can be much more capital efficient.

Scope: applies to her early-stage-only strategy; they will be more concentrated than most seed funds, writing $1M-$8-10M checks

13:57 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

Marcelo Claure · Jul 31, 2023

Investing a smaller pool of capital demands quality over quantity and far more caution in company, founder and time allocation than the SoftBank portfolio-play mandate did

At SoftBank the mandate was to build a portfolio and deploy a very large amount of capital into the most successful tech companies; with less capital available the returns have to be the very best

17:28 20VC: Marcelo Claure & Shu Nyatta on Lessons from Investing $7.5BN at Softbank & Why Dumb Money has Gone, Why "LATAM is Under Construction" and the Next 10 Years Will Be the Best & Investing Lessons from Missing Nubank & OpenAI & Investing in FTX

Nikhil Basu Trivedi · Sep 6, 2023

A constrained fund size forces better investment decisions, whereas a bigger fund breeds laziness and worse decision-making — the same way too much early capital does for a company

Being unable to do large-price rounds removes the option and forces discipline

14:03 20VC: Why Small Funds Outperform Large Funds & AUM is a Vanity Metric | Why 99% of Investments in AI Startups Will Go To Zero | Being a "Traction First" VC & Investing Lessons from Investing in Canva and Missing Figma with Nikhil Basu-Trivedi

Mike Lazerow · Aug 2, 2021

A small partnership should stay multistage and spin up single-purpose vehicles for larger checks rather than raise massive funds it would struggle to deploy

They want to meet entrepreneurs wherever they are and can help with larger checks, but with only four partners a huge fund would be hard to deploy

Scope: specific to a four-partner firm at present

39:45 20VC: Mike Lazerow on Why How You Operate As a VC Is More Important Than Who You Are and What You Have Done, Why Boards Are More Important for the Entrepreneur than Investor & How The Best Entrepreneurs Prep Their Boards & Extract Value From Them

Mamoon Hamid · Oct 21, 2024

Kleiner Perkins should not become a capital accumulator; early-stage venture with a select fund size is a beautiful asset class if you follow the power law and land in the few companies that matter

Returns come from being in the very few companies that really matter, which a select-size early-stage fund can capture

51:30 20VC: Kleiner Perkins' Mamoon Hamid on Investing Lessons from Leading Rounds in Figma, Slack and Rippling | Lessons Building a Generational Defining Firm with Kleiner Perkins | AI: Where Value Accrues, Startups vs Incumbents & Scaling Laws

Hemant Taneja · Sep 22, 2025

Venture funds should be capped at the size that can deliver elite performance — at least 4-5x on capital raised — and additional capital should be raised as separate creation and customer-value vehicles rather than by enlarging the venture fund

Scaling the venture fund itself degrades performance, whereas separate vehicles can serve founders' M&A and sales-and-marketing capital needs without diluting venture returns

9:37 20VC: General Catalyst CEO Hemant Taneja on The Future of Venture Capital: Chanel vs Walmart | Lessons Scaling GC to $40BN in AUM | Investing $5BN+ Into Stripe Over 14 Rounds | Investing Hundreds of Millions into Anthropic at $60BN Valuation

Matt Murphy · Jul 27, 2026

The right approach is to keep fund size at a level appropriate to the environment and bring LPs in via SPV when capital per company exceeds the fund mandate, rather than sizing the fund up to capture the extra economics

Extra economics from going full-stack outside the mandate is a real consideration, but keeping the fund appropriately sized matters more

Scope: Menlo's own approach

13:54 20VC: Leading Anthropic's First Ever Round | Will Open Source Threaten Anthropic's Business | Do Margins Matter in a World of AI | Why Triple, Triple, Double, Double is Not Good Enough Today | Why Series A is Hard Today with Matt Murphy @ Menlo

Brad Gerstner · Oct 10, 2022

Fund size should be set at the minimum scale needed to execute the strategy — enough to write a $100M check on a weekend, small enough that a $10M Series A check still moves the fund

Altimeter sits between the best seed investors and the public markets, which requires scale, but more scale than needed becomes meaningfully dilutive to returns

Scope: specific to a seed-to-public crossover strategy

31:33 20VC: Altimeter's Brad Gerstner on Why Supercycles and the Powerlaw is the Most Important Thing In Investing, Why Portfolio Diversification is the Opposite of Risk Mitigation and The #1 Question Brad Asks All New Recruits

Rob Go · Jun 23, 2023

Fund size should be derived bottom-up from portfolio construction — number of core investments, reserve ratio, and ideal check size for your stage

Multiplying ~30 core investments per fund by a $1–3M check size at pre-seed/seed, with roughly half the fund reserved for follow-ons, mathematically lands you at a $100–140M fund

Scope: for a pre-seed/seed strategy

6:18 20VC: How to Raise a Venture Fund from Deck to First Meetings to Final Close, Why Venture is a Young Person's Game and Why Multi-Stage Funds Have Not Ruined Seed with Rob Go, Co-Founder @ Nextview

Jake Gibson · Jul 14, 2023

Fund size should be set by check count, check size and follow-on strategy rather than by an abstract target

In fund I nearly every company raised a follow-on quickly and they were effectively forced to participate, so the first-check-to-follow-on ratio was out of whack

8:37 20VC: Why Fund Sizes Should Be Smaller, Should Founders Also Have Their Own Funds, Is Emerging Markets Investing Gone, Is Fintech Investing Dead & Who Will Be The Winners and Losers in VC in the Next 10 Years with Sheel Mohnot, Co-Founder @ BTV

Mark Goldberg · Oct 25, 2024

The right investment pace for a GP is two to three investments per year, and fund size should be built bottoms-up from that pace

Looking back over ten to fifteen years of investment history, two to three per year was the right number; the years where he did far more, like 2021, were the wrong decision

14:31 20VC: The Truth About Multi-Stage Firms; Why Portfolio Services are for VCs not Founders | Why Politics is Rife & Decision-Making is Broken in Large VCs | Why Reserves are Bad for Founders & How Boutique Firms Will Win with Mark Goldberg @ Chemistry

Adam Besvinick · May 29, 2023 · hedged

Venture is trending toward smaller, more specialized funds that will ultimately outperform, producing a sharp bifurcation between vertical/thematic funds and behemoths with nothing viable in the middle

Even large-AUM firms are already spinning out dedicated category funds, and mid-sized generalist firms have no way to stand out

Scope: 'smaller' can mean $250-300M rather than $50M; framed as the direction he hopes and thinks things are trending

33:26 20VC: Why Financial Models at Seed, $5M Seed Rounds & The Fear of Signalling Risk is all BS | Why Multi-Stage Firms Have Destroyed Seed & Who Wins and Who Loses in the Next 10 Years of Venture with Adam Besvinick, Founding Partner @ Looking Glass Capital

Delian Asparouhov · Jul 29, 2024

Sequoia and a16z becoming RIAs points toward them resembling BlackRock-style multi-asset behemoths, while the best seed and Series A technology investors will look more like the Founders Fund model of small teams focused on that single asset class

Scaling headcount and asset classes pulls a firm away from the homegrown venture model that wins at early stage

Scope: restricted to seed/Series A technology investing

57:28 20VC: Twitter's Most Controversial VC Delian Asparouhov on Inside the Walls of Founders Fund: What the World Does Not See | Why Western Europe Will Be Like the Third World | Why SaaS as an Industry Might Be Dead

Martin Casado · Jul 28, 2025

There are only two viable venture strategies today: be a deep specialist with a network and market expertise, or have the full product suite to enter at any stage and adapt as the market shifts

Over his ten years investing, the winning strategy has shifted constantly — sometimes early, sometimes mid-stage, sometimes growth collaboration, even credit — and without multiple funds/products competitors squeeze you out or capture the alpha

Scope: not an AUM question per se; a16z plays the multi-product game; smaller specialist funds must go very focused and very early

49:27 20VC: a16z's Martin Casado on Anthropic vs OpenAI: Where Value Accrues | Cursor vs Replit vs Lovable: Who Wins and Who Loses | The One Sin in AI Investing | Why Open Source is a National Security Risk with China

Byron Deeter · Aug 25, 2025

The Walmart/low-cost-provider framing of large venture firms is wrong; the better analogy is investment banking, where full-service global platforms coexist with high-end specialists

What's happening is a maturation of the asset class, not a race to the bottom on cost of capital — like Goldman, Morgan Stanley and JP Morgan being multi-asset, multi-stage, multi-sector full-service shops alongside boutiques

56:22 20VC: Do Margins Matter in AI? | Is Defensibility Gone For Good? | Is Vertical SaaS Dead in a World of AI | What SaaS Rules Are BS and No Longer Apply in a World of AI | The Future of Venture: Why Chanel vs Walmart is BS with Byron Deeter

Nico Wittenborn · May 22, 2023

Proactively cutting fund size when the macro turns — as Founders Fund did, roughly from $1.8BN to $900M — is the right way to adapt

You immediately operate under different constraints while keeping the next fund in your back pocket, which shows willingness to adapt quickly

Scope: fund size figures given approximately

55:17 20VC: Why Your Fund Model Should Not Rely on $10BN+ Outcomes, Why the Large Funds Got Too Large, The Rise of Solo GP's; The Pros and Cons & Is Consumer Subscription Even a Good Sector to Invest in with Nico Wittenborn @ Adjacent

Jake Gibson · Jul 14, 2023

Founders Fund is the multistage/growth firm he would back, because they shrank their fund size

They reduced their fund size

43:17 20VC: Why Fund Sizes Should Be Smaller, Should Founders Also Have Their Own Funds, Is Emerging Markets Investing Gone, Is Fintech Investing Dead & Who Will Be The Winners and Losers in VC in the Next 10 Years with Sheel Mohnot, Co-Founder @ BTV

Nikhil Basu Trivedi · Sep 6, 2023 · hedged

Only a handful of large funds will actually downsize to re-optimize for returns, though the ones that do will be the smart ones

Downsizing is a really difficult and painful decision to make

Scope: a handful, not a broad trend

11:51 20VC: Why Small Funds Outperform Large Funds & AUM is a Vanity Metric | Why 99% of Investments in AI Startups Will Go To Zero | Being a "Traction First" VC & Investing Lessons from Investing in Canva and Missing Figma with Nikhil Basu-Trivedi

Miles Dieffenbach · Aug 4, 2025

Funds in the $1-2BN range will continue to survive and thrive rather than being squeezed between mega-funds and small funds

At that size you have enough capital to write big checks into abnormally large seed/A/B rounds, but are still small enough that single outcomes can drive extreme fund-level returns; and a performance-driven culture plus a brand associated with generational companies keeps attracting founders who could take cheaper capital elsewhere, as with Vlad returning to Index for his new company

43:08 20VC: Inside Carnegie Mellon's $4BN Endowment | Why 90% of LPs Shouldn't Invest in VC | The $140BN Problem with Multi-Stage Funds | The Hidden Math Behind DPI, TVPI, and Illiquidity with Miles Dieffenbach

Martin Mignot · Aug 11, 2025

There is a viable third path between mega asset-gathering funds and tiny boutiques: a firm large enough to invest across stages from inception to IPO but not gigantic

You need a minimum size to genuinely support founders across stages, but you don't need enormous size to do so

6:34 20VC: Figma, Scale, Wiz: Inside Index's Decacorn Factory | Decision-Making, Investment Process, Biggest Lessons, Biggest Misses | Why Gross Margin is a Fallacy at Seed | Never Turn Down a Deal on Price with Martin Mignot, Partner @ Index Ventures

Mitchell Green · Mar 7, 2026

The 'big or boutique, you die in the middle' thesis is wrong; nimble mid-sized firms like Benchmark and Index are as likely as Thrive or anyone else to find the next OpenAI or Anthropic

They can stay nimble and invest earlier, even if their ownership gets diluted over time

Scope: accepts their ownership percentage will dilute along the way

53:21 20VC: Why the SaaS Apocalypse is BS | Why China Will Win the AI War | Why 50% of VCs Should Not Exist and are Tourists | Why Stock-Based Comp is the Hidden Sin of the Valley with Mitchell Green, Lead Edge Capital

Hussein Kanji · Jan 20, 2025

A first fund needed to reach at least $25M to be viable.

Scope: Hoxton's Fund One, roughly 2013

10:40 20VC: Why Large Seed Rounds Increase the Chances of Success | When to Sell in Venture | Why Multi-Stage Firms Do Not Do The Work | Is Europe Totally F****** and Why AI Means London Can Compete with the US with Hussein Kanji

Harry Stebbings · Jul 6, 2026

You cannot run a Series A strategy today without at least a $400M fund

41:56 20VC: Why Now is the Time for the Application Layer | Why OpenAI & Anthropic Won't Win the App Layer | Why Startups Should be TokenMaxxing | Why VCs Should Reduce Weighting on Price & Ownership in an Age of AI with Mike Mignano, USV

Nikhil Basu Trivedi · Sep 6, 2023

AUM is a complete vanity metric and the worst thing for venture firms to talk about

Small funds outperform larger funds, so aggregate capital raised says nothing about quality; what deserves discussion is capital returned and enterprise value created

50:18 20VC: Why Small Funds Outperform Large Funds & AUM is a Vanity Metric | Why 99% of Investments in AI Startups Will Go To Zero | Being a "Traction First" VC & Investing Lessons from Investing in Canva and Missing Figma with Nikhil Basu-Trivedi

Hemant Taneja · Sep 22, 2025

The binary framing of venture as either mega-AUM gatherer or boutique is wrong; AUM is only meaningful as the value of the capital you've deployed, not the amount you've raised

Maximum alpha comes from the largest value created on the smallest amount of money raised, so even a $300-500M boutique holding the top 10 companies would have the biggest AUM

73:48 20VC: General Catalyst CEO Hemant Taneja on The Future of Venture Capital: Chanel vs Walmart | Lessons Scaling GC to $40BN in AUM | Investing $5BN+ Into Stripe Over 14 Rounds | Investing Hundreds of Millions into Anthropic at $60BN Valuation

Brad Gerstner · Oct 10, 2022

You don't need a larger organization to justify managing more capital — Altimeter could manage twice as much money with the exact same team

The game is about picking the right ideas, making good decisions, thinking clearly and having conviction, not about headcount

Scope: excludes extreme scale, e.g. raising $100bn

49:56 20VC: Altimeter's Brad Gerstner on Why Supercycles and the Powerlaw is the Most Important Thing In Investing, Why Portfolio Diversification is the Opposite of Risk Mitigation and The #1 Question Brad Asks All New Recruits

Mamoon Hamid · Oct 21, 2024

Venture capital is a craft business that does not scale through headcount, though it can scale through capital

Kleiner's seven-person team invests both the $800M early fund and the $1.2B growth fund because half the growth dollars go into their own existing portfolio companies, requiring no extra people

21:44 20VC: Kleiner Perkins' Mamoon Hamid on Investing Lessons from Leading Rounds in Figma, Slack and Rippling | Lessons Building a Generational Defining Firm with Kleiner Perkins | AI: Where Value Accrues, Startups vs Incumbents & Scaling Laws

Jake Gibson · Jul 14, 2023

Many of the largest venture funds have grown so big that they are more management-fee focused than returns focused

At sufficient scale, fee income rather than carry drives the economics, so cutting size is against their interest

Scope: applies to large funds; returns-focused funds behave differently

7:49 20VC: Why Fund Sizes Should Be Smaller, Should Founders Also Have Their Own Funds, Is Emerging Markets Investing Gone, Is Fintech Investing Dead & Who Will Be The Winners and Losers in VC in the Next 10 Years with Sheel Mohnot, Co-Founder @ BTV

Nikhil Basu Trivedi · Sep 6, 2023

People's decisions and actions suggest they don't actually believe the claim, given that the purpose of venture capital is maximizing returns and therefore carried interest

They have made decisions — raising ever-larger funds — inconsistent with that belief

11:05 20VC: Why Small Funds Outperform Large Funds & AUM is a Vanity Metric | Why 99% of Investments in AI Startups Will Go To Zero | Being a "Traction First" VC & Investing Lessons from Investing in Canva and Missing Figma with Nikhil Basu-Trivedi

Nikhil Basu Trivedi · Sep 6, 2023

The real obstacle to downsizing a fund is brand and reputation narrative around AUM, not the need for fees to cover the team

Most venture firms at that scale already have more than enough fees to cover their team; the industry narrative rewards large fund size, making a drop from $2B to $400M reputationally hard

Scope: especially at larger fund sizes

12:01 20VC: Why Small Funds Outperform Large Funds & AUM is a Vanity Metric | Why 99% of Investments in AI Startups Will Go To Zero | Being a "Traction First" VC & Investing Lessons from Investing in Canva and Missing Figma with Nikhil Basu-Trivedi

Beezer Clarkson · Oct 18, 2023

Established firms are unlikely to shrink fund size by 40% because it materially damages what their investing team can do and the careers they are trying to build

Firms have people who want to invest capital and build careers, so cutting fund size has material impact on the investing team

18:04 20VC: Are LPs Open For Business? What Does it Take to Raise a Fund Today? How Has What LPs Want to See in Fund Investments Changed? Why Do LP Incentive Mechanisms Need to Change? Which Funds Will be Hit Hardest with Beezer Clarkson @ Sapphire Partners

Harry Stebbings · Oct 18, 2023

A fund leading seed rounds today needs at least $100M

Scope: applies to funds leading rounds

33:14 20VC: Are LPs Open For Business? What Does it Take to Raise a Fund Today? How Has What LPs Want to See in Fund Investments Changed? Why Do LP Incentive Mechanisms Need to Change? Which Funds Will be Hit Hardest with Beezer Clarkson @ Sapphire Partners

Beezer Clarkson · Oct 18, 2023

A $100M+ seed fund only works if the manager is leading and getting roughly 9-12% ownership

33:24 20VC: Are LPs Open For Business? What Does it Take to Raise a Fund Today? How Has What LPs Want to See in Fund Investments Changed? Why Do LP Incentive Mechanisms Need to Change? Which Funds Will be Hit Hardest with Beezer Clarkson @ Sapphire Partners

Adam Besvinick · May 29, 2023

Iterative fund size step-ups are easier for LPs to underwrite than large leaps, because moving from a $325k to a $425k average check requires no major leap of faith

LPs can believe small increases in check size and ownership without a change in strategy

9:56 20VC: Why Financial Models at Seed, $5M Seed Rounds & The Fear of Signalling Risk is all BS | Why Multi-Stage Firms Have Destroyed Seed & Who Wins and Who Loses in the Next 10 Years of Venture with Adam Besvinick, Founding Partner @ Looking Glass Capital

Mark Suster · May 1, 2024

Going from a $50M to a $100M fund does not fundamentally change strategy — only the number of investments, check sizes and deployment pace — whereas going from $50M to $500M does

At 50 to 100 you're still in the same ballpark: maybe 35 rather than 25 investments, $1.5M rather than $1.2M checks, a three-and-a-half year rather than two-year deployment

19:57 20VC: Mark Suster on The Biggest Fundraising Lessons for VCs, Why the Correction in Venture is Still to Come, Why Private Equity Will Replace IPOs and M&A as the Exit Path & The Woke Left and a Trump Administration; What Happens?

Hussein Kanji · Jan 20, 2025

There are too many small (~$75M) seed funds in the industry today and their model is worrying

Writing the first small ticket and relying on someone else to pick up the slack only works in a bull market, where it's easy to be a feeder fund

48:50 Small feeder seed funds relying on others to follow on only work in bull markets

Hunter Walk · Jan 30, 2023

Starting an evergreen personal-capital seed model does not require nine figures of capital — roughly two years of check-writing from savings is enough to get going, with carry and recycled proceeds funding later years

At 10–12 investments a year at $100–500k with no reserves, the two-year budget is modest; by year three continued carry from prior funds can fund it, and by year eight recycled proceeds can

20:41 Evergreen personal capital seed model needs only roughly two years runway not nine figures

Semil Shah · Nov 21, 2022

Keeping the same fund size and documents fund-over-fund was the right call during COVID rather than raising more, because it is an easier pitch when LPs can't meet you or the portfolio

The model was working, so taking the path of least resistance avoided introducing more variability, and repeating a known size is easier to sell to LPs who cannot meet you in person

5:32 Repeating the same fund size fund over fund eases the lp pitch when in person access is limited

Semil Shah · Nov 21, 2022

Running a $100-150M fund would require targeting ~15% ownership in every deal from the start, which he is not willing to promise entrepreneurs

Small funds on a small base have been wildly accretive; he has seen how much dilution comes in, how long it takes and what the return profile is, and leading every deal to get 15% requires bringing a different set of things to the table

13:18 Scaling to 100 150m would require committing 15 percent ownership in every deal conflicting with founder friendly terms

Gili Raanan · Mar 18, 2024

Adding a $500M opportunity fund does not turn a seed firm into a multistage investor, because the follow-on capital is deployed only into its own portfolio at prices set by others.

The seed funds ($60M each) write first and last check to new teams with no follow-ons; the opportunity fund only follows on in existing portfolio companies and never sets the price.

46:55 Opportunity fund that only follows on in portfolio at externally set prices does not convert a seed firm into multistage

Phin Barnes · Oct 2, 2023

A services-led venture firm should not aim to scale, but to maximize quality of delivery to a smaller number of very high quality companies.

Quality of service delivery and impact is the objective, and bounded statements of work let each new engagement be evaluated against every other use of the same resource.

25:08 Services led firms should optimize quality of delivery to fewer companies not scale

Michael Eisenberg · Feb 8, 2021

A single-stage seed/A fund is preferable to a big multi-stage fund, which carries more reserve and signaling risk when times go bad

Working with a broad partner network means other investors are there to help when times go bad; if you pile money in early and leave no room for others, they won't be there when you need them

9:55 Single stage funds avoid the reserve and signaling risk that multi stage funds carry

Everett Randle · Nov 10, 2025

If a firm stays small, the only way it will impress LPs is with exceptional cash-on-cash returns

36:36 Staying small obliges exceptional cash on cash returns

Philipp Freise · Jun 30, 2025

KKR Europe's assets under management will double and triple over the next ten years, but the incremental capital will not necessarily come through traditional funds

The universe of deals KKR can do is radically expanding — from a $1.5B deal for half of BMG to a $10B deal for half of Axel Springer — and more segments of the European market now want private equity investment, while new capital will come from retail vehicles and insurance capital

29:06 Aum grows through expanding deal universe and new vehicles not traditional fund cycles

Rick Zullo · Aug 23, 2023

Large funds are structurally problematic at the seed and Series A stage because it is extremely difficult to identify at that stage which companies will be $10B outcomes

Only around 20 cloud companies are worth more than $10B, and a later-stage investor can back up the truck on an identified winner while a seed investor must pick them before they exist — and it's worse if your fund math requires them

4:55 Large fund math is structurally mismatched to picking 10b outcomes at seed series a

Nikhil Basu Trivedi · Sep 6, 2023

True GP-LP alignment would mean optimizing for the fund's multiple rather than fund size

Misalignment on this is the core of the fund-size problem; Footwork explicitly thinks in terms of multiple

11:34 True alignment requires optimizing fund multiple not fund size

Harry Stebbings · Sep 6, 2023

Small funds are structurally disadvantaged versus large multistage funds because they cannot pay up on price without sacrificing diversification, while large funds are price-insensitive as long as they hit their ownership target

Large funds care only about getting 10-15% ownership, so whether they pay $1.5M or $3M is irrelevant to them; founders then ask why they should take the smaller offer

12:28 Small funds are price disadvantaged since large funds are indifferent to price once ownership target is hit

Harry Stebbings · Sep 6, 2023

Portfolio enterprise value is also a bogus metric for venture firms

A firm can enter at a Series E with a small check and then claim credit for tens of billions of created value

50:43 Portfolio enterprise value claims are bogus since firms take credit for value created before they invested

Nikhil Basu Trivedi · Sep 6, 2023

Footwork's success over the next ten years should be judged by having been lead seed/Series A partner to a handful of truly special founders and category-creating companies, not by AUM or near-term DPI

Distributions and DPI won't show up in five to ten years, so the real signal is the fundamentals, scale and market impact of the few companies they help build

56:23 Judge long term firm success by category creating founders not aum or near term dpi

Harry Stebbings · Jul 28, 2025

Investing out of small funds means a much higher effective cost of capital, so each check is far more consequential and constrains willingness to pay up relative to a large multi-stage platform

A $275M Series A fund and $125M seed fund make the same dollars far more meaningful than they are for a $1.2B fund

51:01 Small fund size raises effective cost of capital and limits price flexibility

Harry Stebbings · Aug 9, 2023

LP churn in large funds is mostly not a problem but a deliberate graduation from one LP class to another, from endowments writing $20-50m to sovereigns writing $250-500m and pension funds

Changing the game you play requires changing the LP profile that fits that game

60:53 Lp base graduates to a new lp class as fund size scales

Trae Stephens · Apr 3, 2024

Founders Fund sits between boutique and capital accumulator, and the traditional venture model — a Series A check plus follow-ons into what's working — is the right way to back category-defining companies

Being 'cute' with weird structures, debt instruments and big category-specific funds is a distraction from the core strategy of investing in the best founders

30:40 Traditional series a plus follow on model beats novel structures for backing category definers

Beezer Clarkson · Oct 18, 2023

Early-stage managers are already reducing fund sizes, though modestly — a $250M fund coming back at $150M rather than halving

Round sizes are coming down somewhat and managers can go earlier or find other ways, so the math pulls fund sizes in

17:01 Early stage managers are modestly reducing fund sizes in response to market

Harry Stebbings · Oct 18, 2023

Managers can't meaningfully cut fund sizes because seed pricing is as high as it has ever been

17:20 High seed pricing prevents meaningful fund size cuts

Beezer Clarkson · Oct 18, 2023

Whether seed pricing forces you into a larger fund depends on where you're shopping and who you are

17:25 Seed price pressure on fund size depends on market segment and manager identity

Harry Stebbings · Oct 18, 2023

We will see the death of micro funds after the wave of $5-15M AngelList funds where everyone was raising a vehicle

The proliferation went as far as founders pitching him a company and a fund in the same meeting

19:51 Proliferation of micro funds will reverse as the angellist wave dies out

Beezer Clarkson · Oct 18, 2023

Micro funds won't die — small vehicles work, and there are now more ways than ever to stand up a fund

A number of VCs have built large LP programs investing in 50+ funds, and she sees decks where all the LP capital comes from other venture funds or venture individuals, which has let many more small funds get started

20:07 Micro funds remain viable supported by growing lp fund of funds programs

Mark Suster · May 1, 2024

A $20M fund is a viable fund size

18:39 Very small funds around 20 million are a viable fund size

Mark Goldberg · Oct 25, 2024

A $10-15M lead Series A check is viable for a $350M fund if you invest a click earlier, before a category winner is obvious

Going earlier means more risk and rolling up sleeves before obvious financial traction, but avoids needing to write $30-40M checks that would be very big swings for the fund

15:32 Investing a click earlier makes smaller lead checks viable for a mid size fund

David Frankel · Aug 8, 2026 · hedged

His firm should stay fund-size disciplined and not raise a growth vehicle, because the GP is the largest LP and is greedy for returns and DPI rather than management fees.

GP-as-biggest-LP alignment means the incentive is realized returns, not fee income, so strategy and DPI discipline dominate.

23:59 Gp as largest lp alignment favors dpi over fee growth

David Frankel · Aug 8, 2026

He would only raise a larger fund if Series A/B/C companies became genuinely orphaned and undervalued, and that opportunity does not exist today

Capital currently finds its way to everything, so there is no abandoned stage to arbitrage; the trigger would be strong-revenue companies being mispriced, not momentum

70:23 Scale only if a stage becomes orphaned and mispriced

Jake Gibson · Jul 14, 2023

Venture fund sizes should get smaller; the industry is in a prisoner's dilemma where growing funds commit the asset class to returns it probably won't deliver

There is still capital wanting into venture, so funds keep growing; if everyone shrank, the industry would invest at lower valuations and be better off, whereas bigger funds make managers relatively price-agnostic

0:00 Prisoners dilemma of growing fund sizes commits the asset class to unreachable returns

Jake Gibson · Jul 14, 2023

The very large seed funds like True Ventures and Initialized are too big

They are writing $10M checks, which are really Series As, and as fund size grows you become more willing to do five-on-25 deals that aren't good for founders because you need to get dollars out the door

35:34 Very large seed funds are too big writing de facto series a checks to get dollars out the door

Jason Lemkin · Nov 3, 2023

Over the last four or five years LPs became willing to put far more money into performing angels and micro funds, so fund sizes that seemed crazy became commonplace

When he raised a $70M fund in 2016 people thought it was nuts and expected 15-20M from someone like him; by the time of funds like Flex that had become normal

7:30 Lp willingness to back angels and micro funds grew normalizing larger fund sizes

Miles Dieffenbach · Aug 4, 2025

The firms able to raise $1-2BN funds have earned it — they have produced genuinely strong performance and deserve larger funds

Most funds can't raise that much at all, so the ones that can have had good enough performance to justify it; he has looked at all of their returns

44:10 Firms that can raise 1 2bn have earned it through performance

Danny Rimer · Jun 17, 2024

Index deliberately did not raise larger funds because bigger funds would change the firm's culture, motivation and configuration

Larger funds force more hiring, more partners around the table and bigger teams; they also delay carry and make management fees more attractive, which distorts motivation

27:33 Staying small preserves culture and motivation avoiding fee driven distortion

Matt Murphy · Jul 27, 2026

Raising much more capital than Menlo's $3B would damage the firm — bigger funds force multiple sector teams that reduce alignment, agency and collaboration and turn a firm into a company

When you have five different teams everyone is 'out for a pass' and one underperforming group drags on the others; small teams with fluidity across funds preserve alignment

37:46 Bigger funds force multi team structures that break alignment

Max Altman · Nov 21, 2025

For a brand-new partnership, starting with a $125M fund rather than $300M was the right call

The smaller size lets them prove the three partners can work together, and the construction math (20-25 lead seed checks at $2-2.5M, 30% reserves, 10% for opportunistic deals) sizes to roughly $125M

35:31 Start small to prove a new partnership then size up

Harry Stebbings · Nov 21, 2025

The classic boutique seed firms that stayed boutique are in a tough spot, whereas firms like Felicis that scaled AUM into multistage did so cleverly and efficiently

62:21 Staying boutique is now the losing position scale into multistage

Shu Nyatta · Jul 31, 2023

A smaller, more selective fund with personal, one-company-at-a-time involvement is a better approach for LATAM than SoftBank's large-scale capital deployment plus a big central support organization

The big-capital, big-support-org model worked at SoftBank's scale, but LATAM still lacks full ecosystem maturity, so changing individual companies' trajectories one at a time fits better

34:24 Smaller selective funds fit emerging markets better than mega scale deployment