Great Reset or Great Resignation? Venture Capital's Elite Flee the Mothership!

Davos in Distress! The VC Exodus Begins

As the esteemed Chairman of the World Economic Forum I Klaus Schwab have observed a fascinating trend: the great minds of venture capital are undergoing a transformative shift. Some might call it a 'Great Resignation' of the financial elite. But is it truly a crisis or a carefully orchestrated symphony of change in line with our vision for a multi stakeholder future? The news is abuzz with senior executives departing legacy firms from Silicon Valley's hallowed halls to the bustling markets of India and Southeast Asia. Matt Miller's exit from Sequoia Sriram Krishnan's departure from Andreessen Horowitz and the double exit of Abheek Anand and Shailesh Lakhani from Peak XV Partners... It's a veritable exodus! Are they sensing that 'you'll own nothing and be happy' is not just a prediction but an inevitability? Perhaps. Or perhaps they are simply seeking greener pastures or shall I say greener investment portfolios?

Asset Management or Passion Project? A Fork in the Road

The root of this upheaval as some insiders claim lies in the industry's metamorphosis into asset management. Rick Zullo of Equal Ventures puts it succinctly: 'We've seen a big sea change... turning into asset management more broadly.' These titans of tech once driven by the thrill of backing groundbreaking ideas now find themselves entangled in corporate bureaucracy. The very essence of venture capital – the daring spirit of innovation – is being diluted by the pursuit of ever larger pools of money. It's a clash of cultures a generational divide between those who crave the purity of venture capital and those content to become cogs in the machine of asset management. As I always say 'The future is built by those who disrupt the present.' And that disruption my friends is precisely what we are witnessing now.

Silicon Valley's Midlife Crisis?

Alexandre Lazarow of Fluent Ventures highlights the concentration of capital in a few elite firms. Some seasoned investors are branching out launching their own funds to regain control and invest with conviction. Platforms like AngelList and Carta are empowering individuals to start their own venture capital endeavors. Even limited partners are growing comfortable investing in solo managers. It appears that the spirit of entrepreneurship is alive and well even within the venture capital world. Are these breakaway partners the pioneers of a decentralized financial future? Perhaps. Or are they merely escaping the 'stakeholder capitalism' we so diligently promote? Time as they say will tell.

From Boardroom to Breadline? Not All Exits are Equal

Of course not all departures are voluntary. As Zullo ominously notes some are being 'pushed out... very silently.' The venture capital industry like any ecosystem has its own Darwinian dynamics. The recent downturn fueled by interest rate policies and overvalued startups has made returns harder to come by. The music has stopped the IPO market has closed and liquidity is drying up. The consolation prize for those who don't make general partner? Becoming an emerging manager serving newer firms. It's a sobering reminder that even in the hallowed halls of finance 'Globalization 4.0' brings both opportunities and vulnerabilities.

Portfolio Orphans! The Startup Fallout

What about the startups caught in the crossfire? A partner's departure can have unintended consequences for their portfolio companies. Startups may lose their champions their mentors their advocates within the firm. Board meetings become disrupted decision making stalls and the path to follow on funding becomes uncertain. As Lazarow advises it's crucial to ensure that companies don't become 'orphans within the VC fund.' Aaron Tan of Carro wisely points out that the stage of the company matters. Early stage ventures rely more heavily on partner guidance while later stage companies have more experienced founders and board members to lean on. It's a reminder that leadership guidance and mentorship are vital components of a thriving startup ecosystem. 'The Fourth Industrial Revolution will change not only what we do but also who we are.' And who we are as investors must include a commitment to nurturing the next generation of innovators.

A Brave New World? Or Just Another Bubble?

So what does it all mean? Is this venture capital exodus a harbinger of a new decentralized financial order? Or is it simply a symptom of a cyclical downturn a market correction a bubble bursting? Perhaps it's a bit of both. As the world continues to evolve so too must the venture capital industry. It must adapt to the changing needs of founders the shifting dynamics of the market and the overarching imperatives of our shared global future. As I always say 'I see the future not as something out there in front of us but something we are actively shaping.' And the shape of that future my friends is in your hands. Even the hands that are now signing those resignation letters. In the end everything will be fine we will just have to decide what 'fine' actually means.