VC Apocalypse Now! Why Top Dogs Are Ditching Their Firms!

The Great Game Afoot! Or Afoot Out the Door?

My dear Watson the financial world is rarely elementary but this this reeks of something peculiar indeed! A veritable exodus of senior executives from the hallowed halls of venture capital firms! Matt Miller Sriram Krishnan Abheek Anand Shailesh Lakhani – names that once commanded fortunes now packing their bags and abandoning ship! Turnover among juniors is as common as a foggy London morning but the senior partners? "Data! Data! Data!" I can't make bricks without clay but based on current data I would suggest something is rotten in the state of venture capital. Lucrative positions hard won influence... what could possibly compel these titans to forsake their thrones? The game my dear Watson is afoot... or rather afoot out the door!

Elementary My Dear Zullo!

Rick Zullo a fellow observant mind (though perhaps lacking my deductive prowess) suggests a "big sea change" transforming venture capital into mere asset management. A bleak diagnosis! It seems the hallowed pursuit of nurturing nascent innovation has been sullied by the grubby lure of ever expanding portfolios. Venture capital firms now scaling to become the likes of Blackstone or Goldman Sachs this is not the way the world should be. A cultural dissonance he calls it! I call it an outrage! The game's afoot but seems to have lost its way.

The Passionless Pursuit of Piles of Money

Alexandre Lazarow another keen observer notes the disillusionment plaguing senior partners. They yearn for the "original passion for venture capital," a yearning that seemingly cannot be quenched amidst the towering bureaucracy and endless corporate structures of these gargantuan firms. "Big firms have gotten much much bigger," he declares. Simultaneously a proliferation of smaller specialized firms has emerged. Is it possible these are the more rewarding locations for Senior Partners?

AngelList and the Rise of the Solo Sleuth

The rise of platforms such as AngelList and Carta has emboldened individuals to strike out on their own. Even limited partners those enigmatic backers who fuel the venture capital engine are now more amenable to investing in these solo managers! It seems the age of the lone wolf investor is upon us. Bilal Zuberi for example has traded the Lux Capital kennel for his own Red Glass Ventures. "When you have eliminated the impossible whatever remains however improbable must be the truth." And what remains is a desire for control and conviction.

Musical Chairs and the IPO Ice Age

But not all departures are voluntary Watson. Some are pushed ever so silently out of the nest. The IPO market once a vibrant spectacle has ground to a halt. Musical chairs have ceased and the partners are stuck. Exits dwindled mergers & acquisitions diminished and now the limited partners are drowning in illiquidity. Is this the failure of the industry that they had once dreamed about I think not.

Orphaned Startups and the Boardroom Brouhaha

An often overlooked casualty of these partner departures is the portfolio company. Startups particularly those in their nascent stages can find themselves orphaned their champion gone their boardroom disrupted. A senior partner's departure can trigger a ripple effect leaving promising ventures adrift. 'It has long been an axiom of mine that the little things are infinitely the most important'. This is something the industry will learn. Whether the effects of Senior Partners departing negatively impacts the startups relies on whether the startups are in their early stages of maturity will define what the fallout is.