September 12, 2012

Broken VC model: Pressure increases as VC goes mainstream

The financial crisis seemed to mark a turning point in the spectacular growth of alternative investments, such as managed investments in hedge funds, private equity, real estate, commodities, and infrastructure. Poor
September 12, 2012

Broken VC model: Pressure increases as VC goes mainstream


The financial crisis seemed to mark a turning point in the spectacular growth of alternative investments, such as managed investments in hedge funds, private equity, real estate, commodities, and infrastructure. Poor

The financial crisis seemed to mark a turning point in the spectacular growth of alternative investments, such as managed investments in hedge funds, private equity, real estate, commodities, and infrastructure. Poor performance and liquidity problems led to massive redemptions. By now, however, those problems have subsided, and alternatives are back on track. As a matter of fact, alternative investments have reached a compounded annual growth rate of 14 percent since 2005, far outstripping traditional asset classes. As VC goes mainstream, this increases pressure on new answers to the broken VC model as posted here. We, ourselves, have changed the approach to venture capital – both in terms of remuneration, strategy, and governance.