How will venture capital change in the next decade? originally appeared on Quora: the place to gain and share knowledge, empowering people to learn from others and better understand the world.
In the world of venture capital, there will be more winner-take-most markets versus the niche markets of today.
Historically, venture capital firms have been a cottage industry. VC firms are filled with very talented investors who generally have chosen to be VCs (versus founders) because they want a more predictable path to decent wealth, do not want to manage people (or build a large organization), and want to work less (and spend more time with their family and skiing).
In the next decade, we will see the rise of CEOs as venture capitalists who are focused on owning and dominating a niche. We will see more VC firms look more like private equity firms (which consist of people that work insane hours and build very large organizations). And we’ll see the very best VCs increase the products they offer.
We should expect VCs to be much more ambitious. Here are four examples (and there are plenty of others) of very ambitious VCs:
1. Y Combinator
YC is one of the most impressive organizations. They are, by far, the most dominant accelerator. Depending on how you define market share, YC likely has over 70% market share for accelerators. And they may have over 90% of the mind-share (when you think of “accelerator”, you think “Y Combinator”… they are the “Kleenex” of accelerators).
YC is crazy ambitious. They have multiple funds, work with thousands of companies, have built a super network, are building new science projects, have pioneered OpenAI, and more. YC has a growing staff filled with amazingly talented people (the folks that are attracted to work at YC are top-of-the-line).
In fact, it is really hard to compare YC to any VC (there is just no comparison when it comes to comes to ambitions). YC looks much more like a mini Google or Amazon than it does a venture capital firm. It is entirely possible that YCombinator itself could one day be as valuable as the largest public companies. And expect YC to IPO in the next ten years.
Social Capital is not a venture capital firm, it is a 21st century financial institution. They have a high-functioning VC arm, a hedge fund, crypto assets, a public SPAC, and more.
The CEO, Chamath Palihapitiya, is hard-charging and demands performance from those that work for him -; just like any CEO of any great company would.
Social Capital is less of a VC firm and much more of a future Blackstone or KKR. We should expect it to continue to innovate and push the envelop in the next decade.
3. Peter Thiel
Peter Thiel has leveraged his position to start many different projects. He founded at least four successful venture capital firms (and has helped fund many others) including the iconic Founders Fund. He also runs a successful hedge fund and co-founded Palantir Technologies.
Of course, he is also well-known for his non-profit and political organizations he has started including the Thiel Fellows.
Peter Thiel is so much more ambitious than even some of the most well-known venture capitalists.
AngelList (run by Naval Ravikant) has up-ended seed-stage investing -; they are becoming a dominant platform for discovering new companies. They also have many different products including an impressive recruiting solution.
AngelList is run like a company, not a traditional venture firm. When they wanted to expand their offering, they did what many growing companies do: they acquired a tech start-up. AngelList completed a very successful acquisition of Product Hunt last year. When was the last time a traditional venture firm acquired a company?
VCs have actually been a lot less ambitious than one would expect (given the caliber of people involved). The net-worth of the best performing VC (from being a VC) is 30x smaller than the net-worth of the best performing founder. In fact, many of the super-successful founders that transition to being a VC make less as a VC than they did as a founder.
In the next ten years, we will see the rise of super-ambitious VCs that will build large financial product companies.
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