THE BIG BOOK OF VC

Rethinking Venture Capital

A Strategic Lens

MAY 2025
Contents
This PDF contains interactive elements.

1 2 3
Inception 4 Venture Inside Out 13 All Things Macro 25
About 5 Why Venture? 14 Macro Snapshot 27
Thanks to the Contributors 6 Venture Value Chain 19 Interconnections 30
Summary 8 Venture’s Dissonance 21 Venture Scenarios 32
Takeaways for LPs & GPs 11

4 5 6
Capital Inputs 34 How to Venture? 44 All Things Funds 75
Alternative Investments 35 Know Thyself 45 Funds & FoFs 76
Wealth & Alternatives 38 Allocations 48 Interview: VC FoF
Established Managers 79
Interview: Thoughts on Interview: Thinking About
Indian Family Offices 40 Alternatives and Allocations 52 Interview: VC FoF
Emerging Managers 81
Interview: PE/VC Insights
from Family Office Backed FoF 54 Interview: Private Markets
Allocation: IA Perspectives 83
Venture Allocation 56

Three Tenets of
Venture Investing 60

7 8 9
On the Ground 87 All Things Exits 95 Secondaries 104
All Things Fundraising 88 All Things M&As 100 All Things Secondaries 105
All Things IPOs 102 Interview: Exploring Venture
Secondaries Fund 107

Interview: Secondaries –
Private Stock Insights 109

10
Venture 3.0 113
What’s Driving the Trend? 116

How Venture 3.0 is Playing

Out Across the Value Chain 117

Interview: Insights Into CVC 118

Interview: Democratisation 122

Interview: Rise of Tools for

Private Markets 126

THE BIG BOOK OF VC Rethinking Venture Capital: A Strategic Lens | 2

Disclaimer: This report is for educational purposes only and should not be considered as financial, economic, legal, investment, accounting, or
tax advice. It does not constitute a recommendation regarding the holding, purchase, or sale of any financial instruments. Information and data
presented is sourced from third parties, provided in summary form, and may be incomplete; no representation or warranty is made as to its
fairness, accuracy, or completeness, and it should not be relied upon. Forward-looking statements are based on subjective assumptions, involve
risks and uncertainties, and may not predict future performance; they should not be relied upon. This is an independent report; while venture
experts were interviewed for their relevant expertise and insights, they did not participate in shaping the final content.

THE BIG BOOK OF VC Rethinking Venture Capital: A Strategic Lens | 3

 Section 1
Inception

THE BIG BOOK OF VC Rethinking Venture Capital: A Strategic Lens | 4

 SECTION – INCEPTION | ABOUT

About

2. Why This Report?

This report fills a critical strategic gap in the venture industry. It

delivers a comprehensive 360-degree view of the venture
capital asset class, covering a full spectrum of factors
shaping the entire venture value chain (a natural extension of
‘Macro in Venture’ report (Link) from January 2024). By
connecting themes too often analyzed in isolation—from LP
capital flows to the evolution of the venture business—it offers
an integrated, authoritative perspective in one place.

3. Who Should Read This Report?

In short—this report is for anyone connected to the venture

ecosystem: LPs, VCs/GPs, FoFs, founders, ecosystem builders,
1. About the Author or engaged observers. While broadly relevant, it primarily
focuses on LPs—family offices, institutional investors, capital
Rohit Yadav is a strategic investment leader specializing in allocators, and more—with special attention to the often-
alternative assets and venture capital, bridging innovation with overlooked capital input side of venture.
market opportunities worldwide. He has steered global
investment strategies, led high-impact initiatives, and For deeper tactical insights and patterns—including quarterly
conducted multi-billion-euro investment analysis across data and patterns like valuations—see The Big Book of VC (Q1
multiple asset classes in markets spanning the U.S., Europe, 2025) (Link). For nuanced dialogue with founders and investors,
and Asia. check out TheOnePoint podcast (Link).

He is the creator of The Big Book of VC, a widely-read, data- 4. How to Read This Report?
informed quarterly publication for the venture ecosystem, and
the host of TheOnePoint podcast, where he unpacks high- The venture landscape has grown increasingly complex,
leverage themes in the startup world through conversations shaped by macroeconomic, technological, and institutional
with founders, venture capitalists, and limited partners. forces. This report offers a strategic framework for
understanding the evolving ecosystem—moving beyond
Rohit’s side initiatives reflect his commitment to translating surface-level solo analysis to reveal key structural dynamics.
investment knowledge into tactical insights for the broader Organized through a venture value chain lens, it begins with
community. He has contributed thought leadership articles to capital inputs (LPs), moves through venture investing
platforms such as Crunchbase and CAIA’s Portfolio for the mechanics, and concludes with outcomes and exits—clarifying
Future, served as a guest lecturer on alternative investments at how value is created, captured, and realized. Topics are
Mannheim Business School, appeared as a keynote speaker on strengthened with insightful interview snapshots from 11
topics like "Macro in Venture,” and moderated investing panel venture experts. Where useful, it draws comparisons to other
and sessions. asset classes to provide more meaning to the venture trends.

Recognizing that many engage with venture episodically, the

report retraces recent shifts and offers informed perspectives
on where the industry may be headed. Each section serves as a
foundational primer—not an exhaustive deep dive—
highlighting critical linkages and strategic implications through
new, proposed thought models. Authored independently, the
Rohit Yadav, CAIA
report connects insights, distills takeaways, and sparks
rohit@bigbook.vc
reflection for anyone navigating the future of venture capital.

THE BIG BOOK OF VC Rethinking Venture Capital: A Strategic Lens | 5

 SECTION – INCEPTION | THANKS

Thanks!

Aarti Gupta is the CIO of DM Gupta

Co aborate with people who make you wiser! Family (Jagran Group) for the past 13
years and Anikarth Ventures, an angel-
investing firm that invests in
This report stands stronger thanks to the invaluable innovative early-stage start-ups with
insights of seasoned investment and venture experts. Aarti Gupta
transformative solutions. At FICCI
CIO –Family O ce
FLO, she serves as the National Head
Policy and Advocacy, focusing on
DM Gupta &
women founders and investors. Aarti is Anikarth Ventures
also an independent director with Jindal Stainless Steels and
contributes to the boards of several family-owned businesses and
start-ups. She holds a PhD in Economics from IIT Kanpur, a post-
graduate diploma in business studies from Harvard University, and a
Master's in Economics from Northeastern University.

Interview Topic: Thoughts on Indian Family O ces and Investing

Christoph Junge is the founder of David Clark leads the investment

Alternative Investments Research & team at VenCap – a venture fund-of-
Education, providing courses and fund that has committed USD 2.9
consulting services in Alternative billion to over 450 venture capital
Investments. Previously, he served as funds in the U.S., Europe, China and
Head of Alternative Investments at Christoph Junge India. He has overall responsibility for David Clark
Velliv and has extensive experience in developing VenCap’s investment
Former Head of Alternatives Chief Investment O cer
Asset Allocation, Manager Selection, strategy, fund identification, selection
Velliv VenCap
and Investment Advisory from roles at and monitoring. He has an extensive
Nordea, Tryg, and Jyske Bank. He holds the Chartered Alternative background in both venture fund and public company investments.
Investment Analyst (CAIA) designation and brings more than two David is a regular guest on leading industry podcasts and panels. He
decades of experience from the financial sectors of Denmark and is an Associate of the CFA Society of the UK. Outside of VenCap,
Germany. He is a sought-after speaker and advisor, known for David is a UEFA-A licence football coach.
combining deep industry expertise with a practical, forward-looking
approach to alternative investing. Interview Topic: Venture Fund-of-Funds: Established Managers

Interview Topic: Thinking About Alternatives and Allocations

Eric Woo is co-founder and CEO of Frank Tanner manages the private
Revere, a data and software solution asset investments at Morgan Creek
provider for LPs and allocators and leads the early-stage venture
investing in private markets. strategy focused on advancing
P r e v i o u s l y, E r i c w a s H e a d o f innovation through backing "key-node
Institutional Capital at AngelList, Eric Woo VCs" – pre-seed/seed micro-VCs with Frank Tanner
w h e re h e l e d t h e m a r k e t p l a c e CEO strong founder preference, unique
Director
matching for syndicate leads/fund value-add, and reliable access to top
Revere Morgan Creek
managers with LPs. Before that, Eric founders and companies. Morgan
led the emerging manager programs Creek, founded in 2004 by Mark Yusko
for two large FoFs, where he invested more than $100M across 30 (former CIO of the University of North Carolina’s endowment),
funds. currently manages approximately $2B in assets, primarily across
private markets. The team brings extensive experience from
Interview Topic: Rise of Tools for Private Markets leadership roles at UNC, Notre Dame, Stanford, and Duke’s
endowments, as well as organizations like Kauffman Foundation and
Vulcan Capital.

Interview Topic: Private Markets Allocation: Investment Advisor

Names listed alphabetically Perspectives

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 SECTION – INCEPTION | THANKS

Jamie Rhode is a Partner Joel Sandhu is a partner of Top Tier

at Screendoor, a venture capital fund Access, a Belgium-based fund-of-
of funds backing early-stage emerging funds dedicated to private equity
managers. Screendoor provides investing and serving over 200
institutional investors with curated investors, primarily in Belgium. They
access to next-generation VC firms cover private equity buyouts with two
through fund commitments, co- Jamie Rhode vehicles, ranging from small-cap to Joel Sandhu
investments, and strategic Partner large-cap funds. Top Tier has also Managing Partner
relationship-building—leveraging Screendoor invested in venture capital fund Top Tier Access
insights from established GPs like managers in the past.
Homebrew, Forerunner, and Precursor Ventures. Before
joining Screendoor, Jamie spent over eight years at Verdis Investment Interview topic: PE/VC Investing Insights from Family O ce Backed
Management, a single-family office, where she built portfolios across Fund-of-Fund
VC, PE and hedge funds using a data-driven approach. She began her
career in equity research and credit analysis at Bloomberg, refining
her expertise in investment evaluation and asset allocation.

Interview topic: Venture Fund-of-Funds: Emerging Managers

Michael Motschmann is the founder Nicolas Sauvage is President of TDK

of MIG Capital, a Euro 1.3 billion Ventures, the CVC arm of TDK
venture capital firm based in Germany. Corporation, with $500M AuM and 44
MIG invests in DeepTech and Life investments, including unicorns Groq,
Sciences startups. Michael has been Ascend Elements, and Silicon Box. A
responsible for the growth of the five-time Global Corporate Venturing
Michael Motschmann Nicolas Sauvage
MIG’s business from day 1. He is a Powerlist honoree, Nicolas authors
serial entrepreneur in the classical
Managing Partner President
articles on corporate venturing and
sense. Michael has founded several MIG Capital h o s t s t h e C o r p o r a t e Ve n t u r i n g TDK Ventures
companies in different industries, built Insider podcast. He is an alumnus of
them up, and sold them, for example, the medium-sized production Stanford University’s Graduate School of Business and has been
company Nitrion GmbH. awarded the Corporate Director Certificate from Harvard Business
School.
Interview topic: Democratisation of Venture Capital
Interview topic: Insights into Corporate Venture Capital

Rando Rannus is General Partner at Sim Desai is the Founder and CEO of
Siena Secondary Fund – focused on Hiive – a liquidity platform for venture-
the Central and Eastern European backed companies and their
region. He has been part of the shareholders. After 14 years in the
Estonian Founders Society since 2009. trenches of the opaque and
Every decade, he’s taken on a new Rando Rannus fragmented private markets, Sim Sim Desai
professional challenge – from General Partner founded Hiive with the vision to CEO
consulting in the 2000s to building Siena Secondary Fund centralize, standardize, and automate Hiive
and selling his own startup in the liquidity for private companies and
2010s, and now focusing on investing their shareholders. Before Hiive, Sim
and building a secondaries fund. Rando values balance, enjoys was a pioneer in the trading of shares of VC-backed pre-IPO
traveling, reading about politics, society, and economics, and is into companies, establishing and growing the practice for one of the
biohacking, with the goal of competing in a decathlon at age 100. leading incumbents.

Interview topic: Exploring Venture Secondaries Fund Interview topic: Exploring Secondaries: Private Stock Insights

Names listed alphabetically

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 SECTION – INCEPTION | SUMMARY

Summary

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 Section 2
Venture Inside Out

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 SECTION – VENTURE INSIDE OUT

Why Venture?
Four Lenses for a New Era

Venture capital is often framed in clinical, financial terms—risk, returns, DPIs, multiples. But that
lens only captures a fraction of the story. To grasp the true power of venture, we must view it
through a broader, more nuanced perspective—one that reflects the diversity of motivations,
outcomes, and meanings it holds.

At its best, venture serves four vital roles: a catalyst for innovation, an opportunity for investment,
a tool of strategic advantage, and a vehicle for emotional conviction. Each perspective reveals a
distinct reason why individuals, institutions, and even governments are drawn to venture investing
today. Let’s explore each in turn.

Topics covered in this section:

1. The Innovation Angle

2. The Investment Angle
3. The Strategic Angle
4. The Emotional Angle

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 SECTION – VENTURE INSIDE OUT | WHY VENTURE

Why Venture?
Four Lenses for a New Era

Illustrative Analysis from The Big Book of VC, May 2025

Innovation doesn’t follow a straight line. It zigs and zags. It Venture is often described in cold, financial terms: DPIs,
fails, restarts, and scales. And through every phase—from returns, failure rates, multiples, and so on. But that framing
ideation to incubation to commercialization—venture model barely scratches the surface. To truly understand the power and
provides the resources, structure, and risk tolerance required to promise of venture, we need to examine it through a broader,
bring ideas to life. Sometimes that looks like a venture capital richer lens—one that reflects the variety of motivations,
(VC) fund backing a seed-stage startup. Other times, it's a outcomes, and meanings it can hold.
corporate innovation lab nurturing internal breakthroughs, or a
nation-state creating moonshot programs to leapfrog the To truly understand the power and promise of
future. The models vary, but the logic is the same: venture is venture, we need to examine it through a
the feeding mechanism of technological growth.
broader, richer lens—one that re ects the
variety of motivations, outcomes, and meanings
The models vary, but the logic is the same:
it can hold.
ve ntu re i s t h e fe e d i n g m e c h a n i s m of
technological growth. There are at least four powerful ways to look at venture: as a
lever for innovation, an opportunity for investment, a tool of
The relationship between technology and venture is not just
strategy, and a vehicle for emotional belief. Each of these
tight—it’s inseparable. One does not simply support the other;
perspectives offers a compelling reason for why and how
they co-evolve. They are partners in progress, intertwined in a
investors—individuals, institutions, even governments—should
feedback loop that has shaped, and will continue to shape, the
engage with venture today. Let’s explore each angle in turn.
modern world.

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 SECTION – VENTURE INSIDE OUT | WHY VENTURE

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 SECTION – VENTURE INSIDE OUT | VENTURE VALUE CHAIN

Venture Value Chain

The Circular Capital Flow That Underlines the Asset Class

The venture capital ecosystem operates through a cyclical flow of capital—beginning with inflows
from LPs (institutional investors, family offices, angels, HNWIs, among others), progressing
through multi-year deployment into startups or VC funds, and culminating in capital outflows via
exits. While 2024 shows $848B in available capital, only $377B was invested and $323B returned
—revealing a structural imbalance.

Liquidity has tightened, with exits lagging and funding still tight. Frictions occur throughout the
cycle, from allocation sensitivity to macro trends, to limited recycling due to underperforming
startups or funds. Notably, LPs often reinvest selectively, influenced by broader portfolio strategy.

Despite current constraints, the venture model follows a structure applicable for many other asset
classes and is designed for long-term value creation. Understanding this flow is essential for
navigating today’s capital environment and planning for future deployment.

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 SECTION – VENTURE INSIDE OUT | VENTURE VALUE CHAIN

Venture Value Chain

The Circular Capital Flow That Underlines the Asset Class

Global Venture Value Chain–Capital Flow for 2024

Illustrative Analysis from The Big Book of VC, May 2025

Like other asset classes, the venture industry operates through While a simplified illustration, this framework depicts the
a circular capital flow. Understanding this cycle is key to venture ecosystem from a high-level view. Sometimes it’s
grasping the nuances that link macroeconomic trends with the essential to zoom out to be able to zoom in. I created the chart
dynamics of the venture ecosystem. above in January 2024, and it quickly gained traction for its
explicit depiction of circular capital flow. The current version of
Let’s dive into the key elements of venture capital flows: this report has been updated with the latest 2024 global data.

1. Capital In ows: Venture begins with limited partners (LPs)— • Capital In ow: Global VC dry powder stands at $677 billion
ranging from large institutions to angels and HNWIs— in 2024 (Link), while venture fundraising reached $171 billion
allocating capital for reasons like returns, diversification, or (Link). Although these numbers aren’t fully additive—due to
strategic exposure. Institutions provide most of the capital; timing differences in capital calls, for instance—for
angels contribute volume but with smaller checks. simplicity, let’s assume a total of $848 billion in capital.

2. Venture Industry Dynamics: Capital typically stays in the • Venture Business or Deployment Side: Global venture
ecosystem for years, due to longer gestation and lifecycles. investments reached $377 billion in 2024 (Link).
Equity-based investments offer limited short-term liquidity.
Capital moves through startups as they scale, pivot, or exit. • Capital Out ow: Global exits reached $323 billion in 2024.

3. Capital Out ows: Exits (IPOs, M&As, Secondaries) return As shown, there’s a fundamental imbalance: more capital is
capital to LPs, who may reinvest or redirect it based on macro available (whether as dry powder or through new VC
trends, portfolio needs, or returns—closing the capital cycle. fundraising) than is actually being invested — and even less is
being returned through exits.
Friction naturally accompanies venture capital flow. On the
inflow side, LP allocations follow macro trends and sentiment— Looking back, in the years before the exuberance of 2020–
early-stage funding, for instance, dropped in 2023 as HNWIs 2021 (specifically 2017–2019), exit volumes consistently
and angels pulled back. Within the industry, not all startups or exceeded investment volumes. Today, the reverse is true,
funds succeed; losses, failures, and weak exits hinder capital leading to a decade-low in liquidity across the ecosystem. It’s a
recycling. On the outflow side, LPs rarely reinvest all returns difficult phase, but as discussed earlier, venture stands for
into venture, with decisions shaped by market conditions, much more than short-term cycles — it remains a long-term
liquidity needs, and other opportunities. force for innovation and growth.

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 SECTION – VENTURE INSIDE OUT | VENTURE’S DISSONANCE

Venture’s Dissonance
Why the Venture Engine No Longer Runs Smoothly

Venture capital stands at a critical inflection point, marked not by minor disruption
but by a deep structural misalignment. The traditional (10+2) fund model—rigid
and outdated—clashes with today’s accelerated technology cycles and volatile
macro conditions. Capital inflows remain fixed and misaligned, innovation
outpaces regulation, and exits are increasingly unpredictable.

Venture now operates on three mismatched legs, each pulling in different

directions. But within this fracture lies opportunity: to redesign capital models,
recalibrate incentives, and embrace liquidity innovations like secondaries. We must
shift from stark variations to championing sustainable outcomes. The future of
venture demands reinvention—not in five years, but now.

Topics covered in this section:

1. The Misaligned Machine

a. Capital Inputs Structure: Fixed and Misaligned
b. Technology: A Relentless Acceleration
c. Capital Outflow: A Macro Minefield
2. The Core Problem: A Timing Dissonance
3. Where Do We Go From Here?

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 SECTION – VENTURE INSIDE OUT | VENTURE’S DISSONANCE

Venture’s Dissonance
Why the Venture Engine No Longer Runs Smoothly

Venture is at a true inflection point—not just experiencing a RE follows long-standing processes where risk is largely
minor disruption, but undergoing a fundamental misalignment. quantifiable. Venture, by contrast, works in radical uncertainty.
Don’t get me wrong—this dissonance isn’t inherently negative.
Instead, it signals a pivotal moment in the evolution of venture, Startups often begin with nothing more than a vision, and the
one that calls for a deep, inside-out rethinking of what the path from idea to scale can veer wildly—hypergrowth in 18
model truly means and where it’s headed, across multiple months, or five years of pivots before traction. Trying to map
dimensions. This report explores those shifts. It attempts to this unpredictable journey onto a rigid, decade-long fund
understand the forces and make sense of the new terrain. model is like strapping a jet engine onto a bicycle. Fund
vehicles simply aren't built to handle the speed—or the
Venture’s dissonance isn’t inherently negative. variability—of what they are meant to power.
Instead, it signals a pivotal moment in the
evolution of venture, one that calls for a deep, Trying to map this unpredictable journey onto a
inside-out rethinking of what the model truly rigid, decade-long fund model is like strapping a
means and where it’s headed, across multiple jet engine onto a bicycle. Fund vehicles simply
dimensions. aren't built to handle the speed—or the
variability—of what they are meant to power.
The Misaligned Machine
2. Incentive Misalignment Between Limited Partners (LPs)
At the heart of venture’s growing dissonance is a deep and VCs: Even more troubling is the disconnect between the
structural mismatch between how capital flows into the system long-dated nature of venture investing and the short-term
and how modern innovation actually unfolds. This isn’t just a performance expectations of LPs. Most capital allocator
mechanical flaw—it’s a misfit that compromises the system’s functions within LPs are evaluated on an annual basis. Their
ability to deliver on its promise. Borrowing the terminology internal reporting and political pressures skew toward short-
from the previous section of venture value chain, I outline the term optics, not long-term conviction.
three leg issue with venture:
LPs might be drive by short-term performance pressure which
• The capital inflow leg is rooted in rigid, decade-long (10+2) inhibits their ability to make optimal long-term decisions. Most
fund structures. venture returns concentrate in years 7–15, yet pressure for
• The technology leg, the core of the venture business, is early liquidity often forces GPs to exit before maximum value is
evolving at warp speed (think AI), impossible to pin down. realized. This creates a system where GPs are chasing short-
• The capital outflow leg, or the exit environment, is at the term milestones to satisfy LP scorecards, instead of staying
mercy of volatile, unpredictable macro forces. focused on the nonlinear, often slow-burning nature of venture
value creation.
In theory, a couple of these should work in harmony for the
asset class to deliver results. In practice, they’re all out of sync 3. Innovation Outrunning Regulation: The third source of
for the venture. Right now, each part is accelerating—or input dissonance is regulatory misalignment. Innovation—for
stalling—on its own timeline. example from new retail vehicles—has outpaced the creation
of clear frameworks. The regulation lags and ambiguity raises
costs and strains experimentation, especially for new fund
1. Capital Inputs Structure: Fixed and Misaligned
structures aimed at expanding access and liquidity.
1. Rigid Fund Models in a Chaotic Market: Most venture
capital funds are still built on the traditional 10+2 closed-end
structure—capital is committed for a decade (sometimes even In sum, the capital coming into the venture ecosystem is
more). This model was borrowed from private equity (PE) and governed by outdated timelines, misaligned incentives, and
real estate (RE), sectors that thrive on predictability, risk lagging oversight.
modeling, and operational refinement. But venture is not PE–
where funds buy mature companies that generate cash flows,
then optimize them.

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 SECTION – VENTURE INSIDE OUT | VENTURE’S DISSONANCE

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 Section 3
A Things Macro

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 SECTION 3 – ALL THINGS MACRO

All Things Macro

When Macro Meets Venture: Why Global Forces Now Shape Our Ecosystem

The global economic landscape is undergoing a strategic transformation, marked by rising

protectionism, geopolitical realignments, and a shift toward self-reliance and national leverage.
Trade policies, fiscal strategies, and industrial investments are being recalibrated to prioritize
resilience over growth, signaling a departure from globalization’s open-era norms. Across
advanced economies, fiscal conservatism is giving way to targeted public investment and defense
spending.

These shifts are also reshaping venture capital, as macroeconomic forces—interest rates, trade
dynamics, and regulatory shifts—increasingly impact startup ecosystems and investment
decisions. Allocators and venture investors must now incorporate macro scenario planning into
their strategies, recognizing that innovation and global forces are inseparable. Success in this new
era demands strategic adaptation, disciplined capital allocation, and a broadened perspective
that connects markets with policy and geopolitics.

Topics covered in this section:

1. Macro Snapshot
2. Interconnections
3. Venture Scenarios

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 SECTION 3 – ALL THINGS MACRO | MACRO SNAPSHOT

Macro Snapshot
Navigating the New Macro: Strategic Realignment and Beyond

The macroeconomic environment has undergone a profound The concerns are no longer just cyclical—they are beginning to
transformation. The era of ultra-low interest rates, abundant appear structural. A key concern is that the U.S. is becoming
liquidity, and synchronized asset appreciation is firmly behind less attractive to global capital. Rising protectionism and
us. In its place, a more fragmented (check out the graph below regulatory unpredictability might erode investor confidence
depicting the dispersion of returns in equities), volatile regime and threaten long-term growth. At the same time, the
has emerged—defined not by cycles alone but by structural dominance of the U.S. dollar as the global reserve currency is
shifts in policy, geopolitics, and global economic priorities. increasingly under question as other countries seek alternatives
and central banks diversify away from the dollar—gradually
A more fragmented, volatile regime has weakening a core pillar of American economic power.
emerged—de ned not by cycles alone, but by
Perhaps more urgent is the erosion of U.S. corporate moats,
structural shifts in policy, geopolitics, and global
especially in technology. U.S. firms now face serious
economic priorities… This divergence speaks to
competition from global challengers, notably China’s rapidly
a deeper truth: macro forces now cut across all advancing AI sector, with models like DeepSeek. In hardware
asset classes, with private markets no longer and materials, the U.S. lags in areas such as semiconductors
insulated from external shocks. and rare earth components—where China controls roughly
60-90% of global supply (depending on whether you look at
production or processing metrics)—raising strategic concerns
about future industrial competitiveness.

While challenges to American hegemony will

likely intensify over the next decade, any truly
irreversible decline in its global role is likely to
play out over a much longer horizon.

There’s No One Return. Source: FEG (Link) While the U.S. has lost some relative economic and military
ground to rising powers, it remains the largest, most resilient,
and most dynamic economy among developed nations. Its
global trade and financial system incumbency still grants it
The U.S. Is Still at the Helm
immense structural advantages. Despite growing skepticism
Recent macroeconomic turbulence—particularly originating
and rising international competition, the U.S. continues to set
from trade, tariff, and broader geopolitical discussions—has
the tone on many of the world’s defining issues. Though under
led many in the industry to question the durability of U.S.
pressure, its institutions, capital markets, and innovation
exceptionalism. What once seemed like an unassailable
ecosystems retain unmatched scale and influence. While
economic and geopolitical position is now increasingly under
challenges to American hegemony will likely intensify over the
scrutiny.
next decade, any irreversible decline in its global role will likely
play out over a much longer horizon.

Disclaimer: This section is intentionally focused on the broader, long-term macro picture. While short- to mid-term dynamics—such as interest rates, inflation,
and policy changes—are certainly important, I’ve chosen not to deep dive into those factors in this report. One key reason is that the current short-term macro
noise is both high and unpredictable, making it difficult to meaningfully connect with a long-duration asset class like venture. The only significant near-term
macro impact worth noting is the strain on exit environments, which I touch upon briefly here. Therefore, this report highlights structural forces that we must
reckon with as they shape the next 5 to 10 years—such as the rise of a multipolar world, deglobalization, and regional realignments driving renewed emphasis
on industrial policy and manufacturing. Other macro topics that investors should consider are best viewed through the lens of megatrends and trends
(checkout my model here)—think demographic shifts, among others.

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 SECTION 3 – ALL THINGS MACRO | INTERCONNECTIONS

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 SECTION 3 – ALL THINGS MACRO | VENTURE SCENARIOS

Venture Scenarios
From Macro Forces to Venture Scenarios: Navigating the Future with Foresight

In earlier discussions, I laid out the prevailing macroeconomic Investors who rely on fixed forecasts will find themselves
environment—a dynamic interplay of geopolitical tensions, misaligned in a world that increasingly defies linear thinking.
monetary shifts, technological acceleration, and demographic Let’s consider the structural rigidity embedded within the
realignments. We also explored the deepening venture ecosystem. VC firms tend to be thesis-led and sector-
interconnections between macro trends, private markets, and bound. A FinTech-focused VC fund, for example, will remain
venture. What once felt like a loosely coupled relationship is committed to that vertical even if near-term macro signals favor
now a tightly woven system where fiscal policy, rates, another domain, such as industrial innovation or climatetech.
regulatory regimes, and innovation ecosystems coalesce to Similarly, founders are inherently optimistic—sometimes
reshape how and where capital is deployed. This irrationally so—about the singularity of their business vision.
interdependence is only intensifying. This conviction is essential for company building, but it also
introduces a degree of narrative rigidity into the system.
What once felt like a loosely coupled
relationship is now a tightly woven system— LPs and institutional allocators have a unique
where scal policy, rate cycles, regulatory vantage point—and responsibility. They are not
regimes, and innovation ecosystems coalesce to bound by thematic conviction of GPs or founder
reshape how and where capital is deployed. This ambition. Instead, they can and should take a
interdependence is only intensifying. broader, scenario-based view of venture as an
asset class.
Now, it's time to turn our attention to venture scenarios—a
critical lens through which to interpret the future. Why focus on In contrast, LPs and institutional allocators have a unique
scenarios? Because they are one of the most effective tools for vantage point and responsibility. They are not bound by the
navigating complexity. Investment scenarios help us thematic conviction of GPs or founder ambition. Instead, they
understand, anticipate, and prepare for what lies ahead—the can and should take a broader, scenario-based view of venture
essence of investing. as an asset class. Their role is to discern which combination of
strategies, sectors, geographies, and fund models will be best
“You can’t predict, but you can prepare.” positioned across a range of future states.
Prediction implies con dence in a singular
This means asking questions like: What does venture
outcome; preparation embraces uncertainty by
performance look like in a high-rate, low-growth world versus a
building resilience across many… A robust
low-rate one? How does AI disruption impact asset classes?
investment strategy is not one that bets on a How will capital formation thrive if geographic decoupling
single future, but one that performs well across intensifies?
a spectrum of plausible outcomes. This is
especially relevant in venture. The aim isn’t to predict one perfect future, but to explore
several likely outcomes and adjust investments based on what
As once said, “You can’t predict, but you can prepare.” This could happen. This helps LPs reduce risks, take advantage of
principle has guided me and holds even more weight in today’s high-reward opportunities, and bring balance to the venture
multi-variable world. Prediction implies confidence in a singular markets that often swings with trends and hype. In short,
outcome; preparation embraces uncertainty by building thinking through different venture scenarios isn’t just smart
resilience across many dimensions. strategy—it’s a core responsibility.

A robust investment strategy is not one that bets on a single

future but performs well across a spectrum of plausible
outcomes. This is especially relevant in venture. The speed,
direction, and nature of change (especially technological
changes like AI) are all accelerating.

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 SECTION 3 – ALL THINGS MACRO | VENTURE SCENARIOS

Two Venture Scenarios

Below I’ve outlined two scenarios—‘Weakness Scare’ and ‘Uptick Cycle.’ These should not be viewed as binary outcomes, but rather
as reference points within a spectrum. Investors are encouraged to weigh each scenario according to their own expectations and
convictions about the future.

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 Section 4
Capital Inputs

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 SECTION – CAPITAL INPUTS

Alternative Investments
A Trillion-Dollar Growth Story

Understanding the growth of venture capital requires examining its place within the broader
alternatives and private markets ecosystem. Venture is not an isolated asset class—it plays a
pivotal role in the alternatives segment that has expanded from $4.8 trillion in the early 2000s to
over $22 trillion today. The rapid rise of alternatives is driven by investor demand for
diversification, downside protection, and enhanced risk-adjusted returns.

Amid geopolitical and fiscal challenges, private capital is stepping in to address funding gaps
across sectors like infrastructure. As traditional portfolio models falter, alternatives offer a resilient
complement to public markets. With ongoing innovation and institutional uptake, the alternatives
sector—particularly private markets—is positioned for sustained, long-term growth.

Topics covered in this section:

1. What’s Fuelling the Rapid Growth of Alternatives?

2. Rise of the Private Markets
3. Zooming Out

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 SECTION – CAPITAL INPUTS | ALTERNATIVE INVESTMENTS

Alternative Investments
A Trillion-Dollar Growth Story

Although this report primarily focuses on the venture asset W h a t ’s F u e l l i n g t h e R a p i d G r o w t h o f

class, it’s also important to address why alternative investments Alternatives?
are part of the conversation. Venture capital is, in fact, a key
segment of the broader alternative investments and private A key factor behind this shift is a changing investor mindset:
markets landscape. To truly understand the growth trajectory of alternatives are no longer seen as optional, but as essential to
venture, we must also examine the overall momentum within building resilient, high-performing portfolios. Investors are
alternatives and private markets. This broader perspective turning to these assets for their potential to smooth volatility,
helps highlight the underlying forces propelling the venture enhance returns, and provide true diversification beyond
asset class forward. traditional markets. By introducing varied return streams and
lowering correlation, alternatives enhance portfolio resilience—
To truly understand the growth trajectory of particularly in today’s environment where volatility spans across
venture, we must also examine the overall asset classes. Let’s explore these benefits.
momentum within alternatives and private
markets. This broader perspective helps 1. Private Capital Is Rising to the Challenge
highlight the underlying forces propelling the Around the world, governments are facing unprecedented
venture asset class forward. fiscal pressures as they navigate the demands of major
transitions in manufacturing, climate, and other sectors, all
So here we go. Let’s first talk about alternatives. In the early amid rising geopolitical uncertainty. As public resources are
2000s, these investments comprised only $4.8 trillion—around stretched thin and priorities become increasingly complex, it’s
6% of the global assets under management (AuM) (Link). Over becoming increasingly clear that governments alone cannot
the past two decades, the alternatives landscape has fund every critical investment need. This is where private
experienced remarkable growth, now overseeing over $22 capital has become not just valuable, but essential. From post-
trillion in assets. In those early days, alternatives were mainly pandemic infrastructure to digital supply chain transformation
thought about as hedge funds. Despite this dramatic rise, and resilience-building efforts, the sheer scale of capital
alternatives still account for less than 4% of the world’s total required far exceeds what the public sector can provide.
financial holdings and approximately 15% of global GDP,
Alternative investments have stepped in to fill this gap with
indicating substantial potential for continued growth (Link).
purpose and scale. Beyond the trillions already committed, a
new wave of financial innovation is expanding the private
market landscape—encompassing private finance, new funding
models, and novel structures designed to meet real-world
challenges with institutional rigor. Venture capital, too, is
playing a vital role, channeling funding into breakthrough
technologies across fintech, healthtech, and other frontier
sectors—helping to power the next generation of solutions.

2.Navigating Uncertainty with Downside Protection

Investors are placing greater emphasis on stability and risk
management in a market defined by volatility and
unpredictability. Alternative investments are increasingly
recognized as practical tools for limiting downside exposure
Total Assets in Alternatives Investments (in $ Trillions). Source: CAIA and reducing dependence on public markets. Most advisors
Association, Preqin, HFR, Grandview Research. Data as of 2023. (Link) prioritize lowering public market exposure when incorporating
alternatives into client portfolios, while risk mitigation is the
second most significant reason for alternative allocation.
Although return generation may take a secondary role during
turbulent periods, the long-term return potential of alternatives
remains a key advantage, particularly in more stable
environments.

THE BIG BOOK OF VC Rethinking Venture Capital: A Strategic Lens | 36

 SECTION – CAPITAL INPUTS | ALTERNATIVE INVESTMENTS

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 SECTION – CAPITAL INPUTS | WEALTH & ALTERNATIVES

Wealth and Alternatives

The Rising In uence of Alternatives in Wealth

The wealth management industry is experiencing a transformative shift driven by demographic

changes and structural innovation. The rise of mass affluent investors, a historic intergenerational
wealth transfer, and younger family office principals are reshaping capital markets.

These investors demand greater access to private markets, favoring alternative assets like private
equity and venture capital. Inspired by institutional models, private wealth is now a key growth
driver for alternatives, accelerated by new product structures and fintech platforms.

This democratization unfolds on two fronts: from institutions to private wealth, and from private
wealth to retail. To succeed, asset managers must offer intuitive, transparent, and liquid solutions
tailored to digitally native investors. Embracing this shift is essential for firms seeking long-term
growth and relevance.

Topics covered in this section:

1. The Rising Influence of Wealth in the Capital Markets

2. Connecting the Two: The Rise of Alternatives in Private Wealth
a. The Institutional Playbook Goes Mainstream
3. Two Layers of Wealth Democratization
a. Layer 1: Wealth Managers Embracing Sophistication
b. Layer 2: A Different Kind of Investor

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Wealth and Alternatives

The Rising In uence of Alternatives in Wealth

The Rising In uence of Wealth in Capital Markets gains, wealth transfer topic, and an increasing interest in
alternatives. They’re stepping up as engaged participants in
The wealth management industry is undergoing a generational the venture space. As more families establish these entities
transformation. A confluence of structural and demographic focusing on long-term value, they’re redefining how wealth is
forces is reshaping how wealth is created, who owns/controls managed, expanded, and strategically deployed across
it, and how it's invested. The chart below shows that individual generations.
wealth buckets (UHNWIs, HNWIs, and accredited investors)
comprise more than 50% of the global AuM. This is a massive
space which can be ignored.

Family Office Wealth Explosion. Source: Deloitte (Link)

Trend 4: Younger Principals Stepping Up: A generational shift

is underway in family offices as younger principals begin to
take the reins. They're inclined toward venture capital and
direct investments in startups. Although their strategies differ
Individual Accounts for >50% of Global Assets under Management (AuM).
Source: Apollo Investor Day 2024 (Link) in execution and outcomes, the broader pattern is clear: this
n e w w a v e o f l e a d e r s h i p i s m o re h a n d s - o n , m o re
entrepreneurial, and increasingly driven by a desire to back
innovation as a core part of wealth management.

Trend 5: Financial Asset Growth Drives Regional Wealth

Divergence: Wealth creation is increasingly shaped by the
uneven growth of financial and non-financial assets across
Private Wealth Opportunity Set. Source: CAIA (Link)
regions. APAC and the Americas continue to lead (in % terms),
fueled by dynamic capital markets, while EMEA lags behind.
Trend 1: Growing Mass Af uent Bucket: According to a 2022
Financial assets, being more liquid and fungible, drive broader
report, between 2020 and 2025, mass affluent wealth is
investment into alternatives and compound returns more
expected to grow by 40% (Link)—creating a powerful segment
effectively. Regions with stronger financial asset growth are
of investors who sit between traditional retail and high-net-
thus better positioned to accelerate wealth accumulation and
worth (HNWI) tiers. These individuals demand more
global capital influence.
sophisticated investment solutions, broader access to asset
classes, and personalized, tech-enabled experiences. As their
wealth grows, so does their appetite for private market
exposure.

Trend 2: Intergenerational Wealth Transfer: Simultaneously,

an unprecedented intergenerational wealth transfer is
underway. Wealth transferred through 2048 is estimated to
total $124 trillion (Link). Much of this wealth will pass from baby
boomer men to their spouses and heirs—many of whom are
younger, more digitally native, and more proactive in
managing their financial futures.

Trend 3: Family Of ce Explosion: The growth of family offices Financial versus Non-Financial Growth (Since 2008). Source: UBS (Link)
marks another critical evolution in the landscape of the global
wealth industry. Multiple factors are pushing family offices to
become noteworthy players in private capital–public markets

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Thoughts on Indian Family O ces and Investing

Insights from Aarti Gupta (CIO, Family O ce DM Gupta & Anikarth Ventures)

Rohit Yadav: How have Indian Family Offices invested in the Second, the next gen influence is palpable. Younger family
past? Have you noticed any changes in investment patterns members are driving impact oriented and tech enabled
recently? investments. There is growing interest in private market
Aarti Gupta: Traditionally, Indian Family Offices followed a investing, often guided by global exposure and personal
conservative asset allocation strategy, anchored in real estate, passion.
fixed income, and public equities. Capital preservation was the
dominant theme, and investments were largely domestic. Over Third, collaborative investing is on the rise. Whether through
the last decade, however, there’s been a notable shift. As syndicates, co-investment platforms, or family office networks,
generational transitions occur and global exposure increases, there is a shift from insular decisions to ecosystem building.
many family offices are embracing a more diversified approach. This collective approach improves access, learning, and risk
Today, we’re seeing growing allocation toward private equity, sharing, critical in navigating early-stage ecosystems. India’s
venture capital, international markets, and even alternative macroeconomic stability and demographic dividend provide
assets and sustainability linked investments. tailwinds, but how family offices embrace agility and learning
will ultimately define their success.
“Today, we’re seeing growing allocation toward
private equity, venture capital, international Rohit Yadav: What role have Indian Family Offices played in
the startup ecosystem in the last 3-5 years. How has this
markets, and even alternative assets and
changed recently?
sustainability linked investments. There’s also a
Aarti Gupta: Indian Family Offices have gone from being silent
greater awareness of thematic investing.” spectators to active participants in the startup ecosystem over
the last 3–5 years.
There’s also a greater awareness of thematic investing,
particularly around climatetech, healthtech, fintech, and
“Indian Family O ces have gone from being
consumer brands, which reflect both generational values and
strategic bets on the India’s growth story. Global diversification,
silent spectators to active participants in the
once rare, is now a part of long term risk management strategy. startup ecosystem over the last 3–5 years… The
More importantly, families are moving from passive wealth narrative has shifted from “Should we invest?”
management to active wealth creation. That shift in mindset is to “Where and how do we invest smartly?””
perhaps the most important change of all.
Initially, the engagement was limited often via LP positions in
Rohit Yadav: What are the biggest Indian Family Offices trends venture capital funds or opportunistic direct investments. But
for the upcoming 1-3 years? as success stories emerged and trust in the ecosystem
Aarti Gupta: Three major trends will define the next phase for deepened, allocations have scaled up meaningfully. Today,
Indian Family Offices. family offices are not only writing larger cheques but are also
showing sectoral preferences, co-investing with institutional
“We are seeing clearer governance structures, VCs, and even launching their own venture arms.
CIO appointments, and data backed decision
The narrative has shifted from “Should we invest?” to “Where
making replacing gut based investing… Younger
and how do we invest smartly?” Post 2021, we’ve also seen a
family members are driving impact oriented and
maturing lens, valuations are scrutinized more, diligence is
tech enabled investments.” deeper, and there's greater focus on founder quality,
governance, and path to profitability. While some family offices
First, professionalization. We are seeing clearer governance pulled back in the funding winter, the more seasoned ones
structures, CIO appointments, and data backed decision used the correction to double down on quality. The direction is
making replacing gut based investing. Families are increasingly clear, Indian Family Offices are here to stay and shape the
building in house investment teams or working with multi future of Indian entrepreneurship.
family offices to institutionalize processes.

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Rohit Yadav: What are Indian Family Offices’ expectations from Co-investments alongside trusted VCs is a favored route, it
the startup and venture ecosystem? offers both validation and control.
Aarti Gupta: Indian Family Offices are seeking a balanced
blend of financial returns, strategic alignment, and ecosystem Sector allocation depends on the family’s legacy, interests, and
impact. While IRR and exit visibility remain critical, many family learning agility. But across the board, families are becoming
offices are looking beyond just capital gains. more data driven and thesis led in their decisions, moving
away from emotional or ad hoc investing.
"Indian Family O ces are seeking a balanced
blend of nancial returns, strategic alignment, Rohit Yadav: What challenges Indian Family Offices face when
investing in startups?
and ecosystem impact… There's growing
Aarti Gupta: There are several challenges.
alignment with national imperatives, from
building Indian global champions to supporting First, information asymmetry accessing high quality, well vetted
inclusion, skilling, and sustainability.” deals is still difficult, especially for single family offices not
embedded in VC circles. Many rely on word of mouth or
There's growing alignment with national imperatives, from inbound pitches, which can be limiting.
building Indian global champions to supporting inclusion,
skilling, and sustainability. Many family offices see their startup
“Information asymmetry accessing high quality,
investing as a way to “give forward” by backing entrepreneurs
well vetted deals is still di cult, especially for
solving real India-focused issues—from agri supply chains to
women’s financial access. single family o ces not embedded in VC circles.
Governance and monitoring post investment
Also, family offices want transparency, founder accountability, can be patchy.”
and responsible scaling. They value startups that demonstrate
discipline in operations, clarity in execution, and a well Second, diligence and decision making frameworks are often
articulated path to scale, especially in sectors tied to India’s underdeveloped. Unlike institutional investors, most family
developmental story. offices don’t have large in house teams to run rigorous
evaluations. This leads to over reliance on personal networks or
In essence, the ask is: Don’t just create valuation; create value. gut feel.

Rohit Yadav: Do Indian Family Offices look at startup investing Third, governance and monitoring post investment can be
from a strategic or financial lens, or both? And, are Indian patchy. Some families struggle to add value beyond capital or
Family Offices more inclined to invest directly in startups, or do to track portfolio performance effectively. Lastly, there's the
they invest via venture capital funds? Also, how do Indian emotional quotient blurring of boundaries between
Family Offices decide which startup sectors to allocate capital relationship and rigor.
to?
Aarti Gupta: It’s a mix, but we’re increasingly seeing a dual Family offices need to navigate the balance between backing
lens approach. For many family offices, startup investing is familiar founders versus making objective, high conviction
about diversification and wealth creation. But for others, decisions. That said, awareness is growing, and more families
especially those from industrial, healthcare, or consumer are now engaging advisors, upskilling internally, and
backgrounds, there’s a clear strategic alignment as well. They participating in structured programs to improve their venture
might invest in a healthtech platform that complements their investing playbook.
hospital chain or a SaaS tool relevant to their enterprise.

“For many family o ces, startup investing is

about diversi cation and wealth creation. But
for others, especially those from industrial,
healthcare, or consumer backgrounds, there’s a
clear strategic alignment as well.”

In terms of mode, newer family offices often begin with VC Aarti Gupta
fund exposure, to learn the ropes and access curated deal flow. CIO - Family O ce DM Gupta & Anikarth Ventures
Over time, many shift to “direct investing”, either
independently or through angel networks and syndicates.

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 Section 5
How to Venture?

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 SECTION – HOW TO VENTURE?

Know Thyself
The First Principle of Private Market Investing

In private and venture capital markets, enduring success stems from strategic self-awareness. Top-
performing investors—whether institutional or individual—prioritize clarity over opportunism,
grounding decisions in well-defined boundaries, authentic risk tolerance, and long-term
objectives.

They align strategies with their capabilities, liquidity needs, and portfolio goals, focusing on "fit"
rather than trends. Institutional and multi-generational investors exemplify this approach, building
resilient portfolios through disciplined, purpose-driven frameworks. Conversely, reactive investing
erodes coherence and compromises outcomes.

A personalized understanding of risk—psychological and financial—is critical. Ultimately, self-

knowledge is not philosophical; it is a strategic advantage. When investors anchor decisions in a
calibrated sense of self, they create portfolios that not only perform, but endure—aligned with
purpose, conviction, and the realities of a complex market landscape.

Topics covered in this section:

1. Intro
a. Clarity Within Boundaries
2. A Calibrated Sense of Self
a. Worth and Fit
b. Personalized Understanding of Risk
3. Self-Knowledge as Strategic Advantage

THE BIG BOOK OF VC Rethinking Venture Capital: A Strategic Lens | 45

 SECTION – HOW TO VENTURE? | KNOW THYSELF

Know Thyself
The First Principle of Private Market Investing

Illustrative Analysis from The Big Book of VC, May 2025

In the complex world of private markets (including venture Whether institutional or individual, achieving
capital), success often relies on one key starting principle: enduring investment success begins not with
Know Thyself. Amid the growing boundaries of asset classes,
chasing opportunities, but with achieving deep
liquidity discussions, and evolving macro regimes, the most
clarity about one's own framework for decision-
thoughtful investors possess a clear, honest understanding of
their limitations, goals, and capabilities. Whether institutional making.
or individual, achieving enduring investment success begins
not with chasing opportunities but with attaining profound Institutional investors exemplify this clarity. They tend to take a
clarity about one's framework for decision-making. structured and disciplined approach, consistently aligning
decisions with long-term goals, liabilities, and market realities.
For them, a cohesive investment narrative—stretching from
Amid the growing boundaries of asset classes,
high-level allocation frameworks down to individual investment
liquidity discussions, and evolving macro execution—is paramount. Their long-term perspective enables
regimes, the most thoughtful investors possess them to commit to less liquid, high-conviction strategies, often
a clear, honest understanding of their including bespoke solutions not suited to all investors. They
limitations, goals, and capabilities. seamlessly connect top-down macroeconomic insights with
bottom-up tactical decisions, creating an ongoing feedback
Clarity Within Boundaries loop between strategy and execution.
Whether institutional or HNWIs, every investor performs at
their best when they operate within a clearly defined set of Lessons from Longevity: Consider a multi-generational family
boundaries. These boundaries are not just regulatory or office. Their survival—and often, their growth—across decades
structural—they encompass personal or organizational risk is no accident. It results from a disciplined, structural approach
tolerances, strategic priorities, liquidity needs, operational prioritizing long-term wealth preservation over short-term wins.
capabilities, etc. True investment clarity stems from knowing These families usually design investment strategies that align
what currently exists, understanding what could be possible, with external market cycles and internal family priorities. Their
and focusing on what truly matters. objective is multi-dimensional: to balance cash flow generation
in the near term with nurturing long-term capital appreciation,
ensuring that wealth endures across generations.

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 SECTION – HOW TO VENTURE? | KNOW THYSELF

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 SECTION – HOW TO VENTURE? | ALLOCATIONS

Allocations
Revisiting Allocations in a New Investment Era

A well-structured capital allocation strategy is essential following clarity on ‘Know Thyself’

exercise identifying objectives and goals. Strategic Asset Allocation (SAA) remains the
foundation, aligning long-term goals with risk tolerance, typically over longer term. But in today’s
evolving market, traditional 60/40 models are increasingly insufficient. Investors are expanding
into private markets—particularly venture capital—for exposure to innovation and asymmetric
upside.

This shift demands advanced allocation techniques, integrating economic exposures, regional
expertise, and unified public-private frameworks. Manager selection, especially in illiquid assets,
is now a primary performance lever. Successful allocators combine strategic discipline with
tactical agility, leveraging scenario planning, liquidity management, and qualitative insight to
navigate complexity and build resilient, forward-looking portfolios across the full capital
spectrum.

Topics covered in this section:

1. Strategic Asset Allocation: The Foundational Core—and Evolving Frontier

2. Nine Nuances of Portfolio Allocation

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 SECTION – HOW TO VENTURE? | ALLOCATIONS

Allocations
Revisiting Allocations in a New Investment Era

Illustrative Analysis from The Big Book of VC, May 2025

After the foundational step of understanding oneself an an Traditional models like the 60/40 equities-to-bonds portfolio
investor—“Know Thyself”—and clearly defining one’s investing are being reconsidered as investors pursue more diversified
goals, the next logical step is determining how to allocate allocations to optimize risk-adjusted returns in a complex
capital. This is where investment strategy becomes real. It’s not market. This shift reflects a strategic redefinition of
just about ideas—it’s about putting capital to work in ways that diversification. Much of historical asset allocation research
align with one’s goals, risk tolerance, and time horizon. centers on liquid markets, where capital moves easily.

Allocations: This is where investment strategy As alternatives—especially private markets—

becomes real. It’s not just about ideas—it’s grow in institutional portfolios, sub-allocation
about putting capital to work in ways that align decisions, such as exposure to the venture asset
with one’s goals, risk tolerance, and time class, strategies within venture, and structural
horizon. decisions on accessing venture, have become
critical levers for performance and portfolio
Strategic Asset Allocation (SAA): design.
The Foundational Core—and Evolving Frontier
While SAA remains the cornerstone of a strong investment
SAA has long been a cornerstone of institutional investing. It framework, today’s portfolio management demands greater
involves setting target allocations across major asset classes— nuance—especially as private markets play a larger role in
equities, bonds, and increasingly, alternatives—to align with institutional portfolios. Private markets introduce added
long-term objectives. Designed for longer horizons, SAA's goal complexities through illiquidity, long time horizons, and active
is to maintain a portfolio's risk-return profile without reacting risk, making sub-allocation and manager selection critical
suddenly to short-term market movements. For decades, the differentiators between average and exceptional performance.
investment industry has embraced a core thesis: SAA is the Allocating to venture capital, in particular, is far from passive; it
primary driver of long-term portfolio returns. A few research reshapes a portfolio’s exposure to innovation, illiquidity, and
outcomes show it accounts for up to 90% of return variability, asymmetric upside. Success in this space hinges on disciplined,
underscoring its importance in achieving long-range outcomes. forward-looking execution and, crucially, access to top-tier
However, as the investing landscape evolves, so must our managers and startups.
understanding and application of SAA.

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 SECTION – HOW TO VENTURE? | ALLOCATIONS

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 SECTION – HOW TO VENTURE? | ALLOCATIONS | INTERVIEW

Thinking About Alternatives and Allocations

Interview with Christoph Junge (former Head of Alternative Investments at Velliv)

Rohit Yadav: What role do 'Macro' factors play in Asset Think, for example, of the increasing digitization of our world.
Allocation (AA) and Portfolio Construction (PC) decisions? This affects the return outlook of, for example, data center
Christoph Junge: Macro factors such as interest rates, investments, an area I have been very keen on for the last
inflation, and GDP growth play a pivotal role in shaping several years.
Strategic Asset Allocation (SAA). Let’s focus on interest rates as
an example, given dramatic shift from negative territory to Rohit Yadav: Why are Alternatives, mainly Private Markets,
sharp increases. Interest rates can significantly affect alternative becoming critical in an investor portfolio?
investments like Real Estate (RE), Private Equity (PE), Private Christoph Junge: There are several reasons why Alternatives in
Debt (PD), and Liquid Alts. general and Private Markets in particular are critical in a
portfolio. And each asset class has its very own role to play.
Real Estate: Higher interest rates increase borrowing costs,
which – all else equal – can dampen RE investment activity Private Equity, for example, is all about higher expected
and valuations. My research on Alternatives during crises has returns. I do not see PE as a good diversifier since the same
shown this is not always the case. There were plenty of times macro factors influence both listed and unlisted companies.
when rising rates did not lead to losses on RE investments. But by going unlisted, investors can earn a complexity
It’s important to consider why rates are rising. Often it’s due premium (I’m not a big believer in an illiquidity premium)
to high economic activity, and if NOI (net operating income) and tap into a much larger pool of investments. Only
growth is strong enough, it can more than offset the impact approximately 10% of all companies worldwide with revenue
of higher rates on valuations. above 100 million USD are listed, so by only investing in
Private Equity: Rising or elevated rates can challenge listed companies, one forgoes a large opportunity set. Of
leveraged buyouts due to higher debt servicing costs. This course, this says nothing about market cap. Market cap is
favors GPs strong in operational improvements over those the other way round—90% listed—but each company is
focused on financial engineering. That said, debt seems less another alpha opportunity. So, I’d argue the number of
important anyway. Average equity contribution in an LBO companies is more relevant than market cap for most
reached up to 50% in 2024, up from below 30% in the 90s. investors.
This naturally reduces impact of debt on return on equity. Real assets, like infrastructure and timberland, are good
Private Debt: Most PD is floating rate and benefits from diversifiers and can also hedge inflation, but the devil is in
rising rates – until higher interest burden raises default rates. the detail with infrastructure. These investments should
But recently, PD was more compelling than PE exactly generally be less correlated to business cycle. Lumber is
because of rising interest rates. cyclical, of course, but a large part of the return from
Liquid Alts: Many Liquid Alts strategies, like managed futures timberland comes from biological growth, which is not.
and ILS, now derive a sizeable part of their total return from Private Credit is also about higher expected returns, but
yield on collateral, since rates are no longer zero or negative. even PC is still credit. It’ll be interesting to see how PC
performs during the next real crisis, as the asset class didn’t
So putting it all together, the new interest rate really exist during the GFC and has grown tremendously in
regime has made some asset classes more recent years. One area where PC was more resilient than
attractive compared to others and this public corporate bonds was during the hiking cycle, as PC is
mostly floating rate and profited from rising rates, while
in uences capital market assumptions used as
Investment Grade (IG) and High-Yield (HY) bonds are
input in SAA and hence directly SAA weights. typically fixed rate and suffered.

Rohit Yadav: What role do 'Trends' play in Asset Allocation

And then there are Liquid Alts, like managed futures and CAT
(AA) and Portfolio Construction (PC) decisions?
bonds. These are the true diversifiers in a portfolio. Managed
Christoph Junge:
futures have historically shown the ability to deliver crisis alpha,
e.g. positive performance during times of crisis. CAT bonds are
Given the very long-term nature of many one of very few – if not the only – truly uncorrelated asset
private markets investments, it is crucial to think classes, as the payoff depends on the occurrence of natural
about trends or even mega-trends. catastrophes.

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So, there is no universal answer to that question, as it depends Given my preference for a structured process, I like using RfP
on the asset class. But as eluded, there are many very good platforms for searches to ensure that I cover large parts of the
reasons to include Alternatives in an asset allocation. market and not only from my own network.

Rohit Yadav: How do investors decide which Private Markets Rohit Yadav: What are the biggest Private Market trends that
to allocate, how much, and what time? you see in the market, and how will they impact the future of
Christoph Junge: Investors make decisions about Private the Private Market business?
Market allocations by considering several factors, but key Christoph Junge: There are three major trends that I have
factors are: witnessed.
1. Liquidity constraints 1. Democratization of Private Markets
2. Market opportunities 2. Growth of Private Credit
3. Knowledge and preferences 3. Secondary market maturation

Once the long-term goals and risk level are The democratization of Private Markets is very
de ned, one needs to assess how much interesting and has been ongoing longer in the
illiquidity the portfolio can carry. US, but with ELTIF 2.0, European regulation is
catching up with the demand for Alternatives
For example, Danish labor market pension funds can run a
from private wealth channels. This could unlock
higher allocation to Private markets, as there is less uncertainty
billions in new capital owing into Private
about customer flows compared to commercial pension
providers. Markets!

Another key part of the SAA process is the current market The growth of PC has been underway for years but accelerated
opportunity. Two years ago, PC looked much more compelling recently when public credit markets froze in 2022, with both
than PE. Or, as mentioned earlier, the megatrends — they also base rates and spreads at attractive levels. Some are getting
shape market opportunities. Finally, knowledge and nervous about the massive inflow into this asset class, and I
preferences matter. It’s always easier for an organization to also get nervous when too much money chases deals. One
invest in known asset classes. But there can also be other must carefully watch risks around underwriting standards. On
preferences, such as past negative experiences with a the other hand, this trend could make the financial system
particular asset class. more stable due to more diverse funding sources. Historically,
crises happened when banks lost money and retreated from
Rohit Yadav: What is an institutional-grade approach to lending. Now, with pension funds, insurance companies, and
selecting managers in Private Markets? other capital pools taking over, the economy becomes less
Christoph Junge: The most important part here is structure dependent on banks.
and a stringent process. Institutional investors get pitched
constantly from all directions and all kinds of products. For me, Finally, secondary markets are getting more mature. Players are
it’s important to have a clear strategy and follow it rigorously. raising billions to deploy into secondaries, increasing liquidity
This also makes it easier to reject pitches that don’t match the and making it easier for investors to rebalance. Part of this
strategy. Once a potential investment passes this first gate— maturation is the rise of GP-led secondaries, or continuation
i.e., it matches the strategy—the real due diligence begins. vehicles (CVs). CVs can help in tough exit environments by
offering liquidity to LPs who need it and maximizing returns for
others. Conflicts of interest must be managed carefully. But
The goal of due diligence is to nd out whether
overall, secondary market maturation should be a net positive,
the presumably good track record is real and – as better pricing transparency and efficiency may make Private
very important – repeatable. Markets more attractive to a broader audience.

The four “P” of the due diligence process – people,

performance, philosophy, and process – are key. It might sound
like a no-brainer, but it’s crucial to conduct thorough due
diligence on the track record not only at the fund level but also
at the deal level. Research shows the deal partner is about four
times more important than the organization. So, follow the
deal partner instead of making re-ups at the same GP if the top
deal partner has moved on. Interestingly, none of the typical Christoph Junge
human capital variables (age, gender, MBA, PE tenure) explain Former Head of Alternatives
the cross-section of deal returns. Velliv

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PE/VC Investing Insights from Family O ce

Backed Fund-of-Fund
Snapshot of the interview with Joel Sandhu from Top Tier Access

Rohit Yadav: Joel, thanks for joining. Let’s start at the top—can Rohit Yadav: So from the family office side, are they coming to
you tell us what Top Tier Access is and what strategies you’re you saying, “We want buyout exposure,” or is it more general
investing in right now? conversations around returns and risk?
Joel Sandhu: Sure. The genesis of Top Tier Access came from Joel Sandhu: It really depends on the sophistication of the
recognizing a mismatch in how family offices were allocating to family office. Some know the asset class well, others are still
private markets. There was clearly a huge appetite, but we felt learning. A typical cycle we've seen with many family offices is
the current solutions weren’t always optimized for families— they start with direct venture investments, then realize it's hard
especially from a fiscal, fee, and portfolio creation perspective. to make money unless you're specialized. So then they pivot to
So we basically stripped out the things we didn’t like and built large-cap buyout names like Blackstone or KKR for stability.
something that worked better.
Eventually, they discover those mega-cap funds don’t really
"We saw a mismatch between how family o ces knock the lights out on returns either. Now, everyone’s
were allocating to private markets and the obsessed with the mid-market. But to access those managers
—who often close funds in one go—you need someone like
solutions available to them…. We took a look at
us. So we’ve seen this pendulum: from inefficient venture to
the industry and stripped away everything we
inefficient buyout to now a growing awareness around mid-
didn’t like— scally, fee-wise, and portfolio-wise market efficiency.
—and built something that worked better"
"Most families see venture as an ecosystem
builder or passion project—like backing local
Rohit Yadav: You mentioned earlier that you moved away from
venture capital into buyouts. What was behind that shift? startups… From a commercial perspective,
Joel Sandhu: Just to be clear, we didn’t start as a pure VC there's a more uni ed appetite for buyout FoFs
house. We were always doing buyouts, but early on we also than venture FoFs…. Family o ce
allocated to a few VC managers. Access to top-tier VC was understanding varies—some are very speci c,
hard to sustain year after year, and we were more confident we others come in just asking for good returns."
could build a world-class buyout portfolio consistently.
Commercially, there was a stronger, more unified appetite for
buyouts too. Rohit Yadav: That’s a great framing. Strategically, how do you
choose where to play within private equity—by geography,
From an investment lens, buyouts offer better replicability and sector, or fund type?
risk-return. Most venture managers don’t go above 2x net, and Joel Sandhu: We start with building resilient portfolios.
the loss ratio is high. Buyouts, especially with top managers, Typically, our split is 50-50 U.S.-Europe—though for some
offer strong upside and lower downside. We're not betting on Middle Eastern clients it's 70-30 U.S.-Europe. That reflects the
market creation—we're allocating to stable, often boring depth of ecosystems and exit potential. We avoid Asia for now
businesses that provide solid exposure. —not because it's unpromising, but because performance is
more proven in Europe and the U.S.
"The access to the very top venture managers is
very di cult to do consistently year after We diversify across types and sizes of companies and sectors.
y e a r… . B u y o u t s a l l o w u s t o b u i l d a It's easy to fill a portfolio with just SaaS or tech funds, but then
you risk being overexposed at the top of a pricing cycle. So
programmatic approach— ve managers per
we’ll do around 30-35% tech, 15-25% healthcare, and add
year, new fund every two years…. Our goal is to
industrials, business services, and a bit of consumer. But pure
create buyout allocation like wine vintages— consumer plays tend to be cyclical, so we tread carefully.
diversi ed and consistent."

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Diversification also means types of companies. A software outperform because of fee arbitrage. But for us, as a subscale
company with €10M EBITDA can look totally different player, we ask: what’s the quality of this deal flow? If I’m in a
depending on whether it’s growing at 35% or has a shareholder fund with CalPERS, Mubadala, ADIA, etc.—who have 500
dispute. So we seek a mix: complex situations like take-privates lawyers to write watertight side letters—I have to ask myself,
or successions, good-to-great companies needing why am I getting this? There’s an information asymmetry. Plus,
digitalization, and market leaders with high pricing and growth. we don’t want to choose a manager just because they give us
co-investment rights.
Rohit Yadav: What do LPs expect when they come to you? Are
they focused on returns, capital preservation, co-investments? In buyouts, upside is capped, and downside is unlimited. It
Joel Sandhu: For Europeans, the first question is always about skews the risk-reward if you’re doubling down through co-
taxes—it has a huge impact on net returns. Beyond that, LPs investments. Co-investments can work, and large programs like
want to outperform public markets. Some say, “If I can get LGT and NB do it well, but for us, it’s a separate bucket.
11-12% in PE, why not stick to public markets?”
Rohit Yadav: Finally, when you're evaluating a fund to invest in,
So in our underwriting, we use direct alpha and KSPME what’s the single biggest thing you're looking for?
metrics. The baseline has to be to beat public indices. And Joel Sandhu: In one word—replicability. Performance is the
while there's an assumption that buyouts won't lose money, filter: 2x net for larger funds, 2.5x for smaller. But beyond
people are getting smarter about needing top-performing performance, can they do it again? We want to see MOIC
managers. There’s also skepticism about the industry’s image— distributions that are evened out—not a couple of 20x deals
fees are high, headlines are often negative, and if you’re not in and a lot of zeros. That tells you whether their process is
the top decile managers, you may underperform. That’s where repeatable. We look at human capital—are they operationally
we come in—to curate and structure access properly. improving companies or just doing financial engineering? We
speak to everyone—from interns to managing partners—to
"We don’t take a bet on any one sector—we check if they all think the same way. If the stars of past
want a cross-section of where PE is active…. performance have left, it’s not the same product anymore. The
firm’s philosophy has to be bigger than one person. That’s
Diversi cation isn’t just number of funds—it’s
what we mean by replicability—in every sense.
about company types, sizes, and sectors…. LPs
want private equity to beat public markets—
"Our key criterion when evaluating a fund is one
otherwise why bother with the illiquidity?"
word: replicability… We want to see a consistent
MOIC distribution, not just a few 20x outliers….
Rohit Yadav: Do LPs ever ask to invest only in a specific If the people who generated past returns have
geography or size bucket within buyouts? left the rm, it’s not the same product anymore."
Joel Sandhu: Yes, increasingly. We’ve had people say they
want just the US part of the portfolio. Bigger European families
often want that diversification because their core wealth is in Rohit Yadav: Joel, thank you for such an insightful
Europe. Some just want low-mid market exposure. But no one conversation. It’s been fascinating hearing how you think about
has said, “Just give us consumer” or something that specific. private markets and structure exposure for family office LPs.
Sector-specific requests are rare. Thanks for joining.
Joel Sandhu: Thank you, Rohit. Pleasure to be here.
"Co-investments aren’t part of our FoF—we view
them as a separate strategy…. If I’m getting co-
investment access when CalPERS and Mubadala
are in the fund, I need to ask why…. We don't
want to choose a manager just because they
o er co-investments—it should be about
performance."
Joel Sandhu
Managing Partner
Rohit Yadav: And what about co-investments—do they see Top Tier Access
Top Tier Access as a gateway to those?
Joel Sandhu: That’s a funny one. We don’t put co-investments
in our FoF. Larger FoFs—50% or more—do, and co-
investments can

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Venture Allocation
The Venture Spread Model

Venture capital is no longer a monolithic asset class, yet many investors still treat it as such—
leading to strategic missteps. To navigate its growing complexity, a structured approach is
essential. Inspired by my real estate allocation model, the proposed Venture Spread framework
breaks venture into three layers: base layer structure (how capital is deployed), core (geography,
sector, and stage), and nuance/sprinkles (topics like specialists, mega-funds, solo-GP’s, etc.).

This model helps investors align capital with strategy, reduce randomness, and avoid common
pitfalls like ad hoc investing and over-concentration. In a world where information is abundant,
clarity—not data—is the true differentiator. Effective venture allocation reflects investor identity,
requiring discipline, perspective, and a commitment to long-term, diversified exposure rooted in
strategic conviction.

Topics covered in this section:

1. Real Estate as an Analogy

2. The ‘Venture Spread’ Model
3. Venture Allocation Starts With Knowing Where And Then Comes the How
4. Capital Allocation in the Age of Abundant Information
5. Avoiding Common Pitfalls in Venture Allocation
6. Final Thoughts

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 SECTION – HOW TO VENTURE? | VENTURE ALLOCATION

Venture Allocations
The Venture Spread Model

Illustrative Analysis from The Big Book of VC, May 2025

Venture is no longer a monolithic asset class—truthfully, it Real Estate as an Analogy

hasn’t been for quite some time. Yet, many investors still try to
paint it with a single brushstroke. It’s a recipe set up for failure. To illustrate this structured approach, I’ll briefly reference a
Given the growing complexity of the venture ecosystem, we framework I introduced some years ago for real estate
must rethink how to allocate capital to this space. A more investing—the Real Estate 3D Model. This model divided the
structured, nuanced view can help investors test their real estate (RE) universe along three key dimensions:
capabilities, build conviction, and execute with clarity, making Geography, Sector, Strategy, and Structure (as base layer).
tracking outcomes and performance easier.
• Structure refers to the method of investment: direct
Venture is no longer a monolithic asset class— ownership, pooled investments via funds, REITs, or through
truthfully, it hasn’t been for quite some time. the debt side of real estate.
Yet, many investors still try to paint it with a • Geography can be as broad as Europe or as granular as a
single brushstroke. It’s a recipe set up for failure. specific city—London, Munich, or even down to a single
postal code for high-conviction developers/investors.
• Sector includes typical archetypes like Office, Retail,
To make sense of this landscape, we need to break down
Housing, Logistics, Data centres, etc
venture investing into sub-buckets—distinct but
• S t r a t e g y i n c l u d e s C o re , C o re - P l u s , Va l u e - A d d ,
interconnected areas that can be assessed and optimized
Development, and Distressed—ranging from stable, high-
within broader asset allocation framework discussed earlier.
quality assets in prime locations to turnaround projects
requiring significant transformation.

Every investor can define their focus area by applying the

principles of "know Thyself" (Link) and allocation guidelines
discussed earlier. This RE allocation model offers a robust
framework to navigate investment choices based on individual
risk appetite, domain expertise, and strategic objectives.

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 SECTION – HOW TO VENTURE? | VENTURE ALLOCATION

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 SECTION – HOW TO VENTURE? | THREE TENETS

Three Tenets of Venture Investing

Beyond the Noise: Embracing the True Nature of Venture Investing

Venture capital is a long-term, high-risk asset class best approached through structural thinking,
not short-term tactics. Success relies on recognizing and aligning with megatrends, trends, and
patterns that shape markets over decades. Unlike public markets, venture lacks real-time
feedback and demands a strategic, future-oriented mindset. Timing the market is ineffective;
instead, investors should embrace vintage year diversification to navigate cycles.

Venture returns follow a power law, where a few startups and funds drive outsized gains—making
manager selection critical. Additionally, illiquidity is a feature, not a flaw, enforcing discipline and
long-term focus. While it limits flexibility, it aligns incentives and shields against reactive
decisions. Embracing these realities positions investors to benefit from venture’s transformative
potential.

Topics covered in this section:

1. Long Termism
2. Power Law
a. Side Note – Understanding Basics of Returns and Performance in Venture
b. Venture Performance Demystified
c. Side Note: Manager Selection
3. Illiquidity
a. Side Note – Rethinking Risk in Venture Capital: A Pragmatic Exploration
4. Venture Allocation Case Studies

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 SECTION – HOW TO VENTURE? | THREE TENETS

Three Tenets of Venture Investing

Beyond the Noise: Embracing the True Nature of Venture Investing

Illustrative Analysis from The Big Book of VC, May 2025

1. Long Termism • Patterns: These are emerging changes that primarily affect
one asset class or domain. Their longevity is uncertain, but
Venture capital is inherently a long-term risk asset class. they provide insights into potential opportunities.
Investors who fail to recognize this fundamental characteristic
expose themselves to misunderstanding the asset class and A key observation is that megatrends, trends, and patterns do
diminishing their chances of success. By aligning with long- not operate in isolation; they are intertwined, often
term views, investors can develop a strategic direction and a overlapping, and continuously interacting with one another.
more profound impact on portfolios, industries, and For instance, AI is transforming venture capital—not just as a
economies. tool for efficiency, but potentially as a new frontier for
investment. Recognizing this intersection is crucial for strategic
Venture capital is inherently a long-term risk decision-making.
asset class. Investors who fail to recognize this
A key observation is that megatrends, trends,
fundamental characteristic expose themselves
and patterns do not operate in isolation; they
to misunderstanding the asset class and
are intertwined, often overlapping and
diminishing their chances of success.
continuously interacting with one another.
Building the Vocabulary
Understanding how venture capital fits into the broader Understanding the Interplay
investment landscape requires a framework that differentiates Every significant global event results from multiple movements
between various levels of market shifts. So let’s build the converging and influencing one another, creating a complex
thought-process framework: web of causality that investors must analyze. For example, the
outcome of the U.S. election is not determined solely by
• Megatrends: These are transformative, multi-decade forces political campaigns but was shaped by underlying forces such
that shape economies, industries, and societies beyond as demographic changes, economic inequality, immigration
typical market cycles and influence multiple asset classes. policies, inflation concerns, and the shifting dynamics of global
• Trends: Trends ride on or are influenced by megatrends. power. These factors, in turn, are influenced by broader
They can or cannot result in megatrends, but they also may megatrends like technological advancements, social
fade away with time, giving rise to new trends. movements, and economic globalization.

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 Section 6
A Things Funds

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Funds and Fund-of-Funds (FoFs)

Understanding the VC Funds and FoF Ecosystem

Startup investing can be approached indirectly through VC funds or venture fund-of-funds (FoFs),
each offering distinct advantages. While FoFs often face criticism for double-layered fees, they
provide critical benefits: curated access to top-tier managers, deep due diligence expertise, and
insider knowledge of a semi-opaque ecosystem. These advantages can be particularly valuable
for investors lacking internal VC capabilities.

In today’s bifurcated fundraising landscape—where established managers and mega-funds

dominate—FoFs offer efficient access and portfolio diversification. For LPs, manager selection
matters more than fund size or style, with the focus on long-term fit and execution. Ultimately,
both VC funds and FoFs should be viewed within a broader portfolio strategy, with allocations
shaped by each investor’s goals, experience, and capacity to build a venture program.

Topics covered in this section:

1. Understanding Venture Fund-of-Funds (FoFs)

2. Understanding Venture Funds
3. Allocating to VC Funds and VC FoFs

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 SECTION – ALL THINGS FUNDS

Funds and Fund-of-Funds (FoFs)

Understanding the VC Funds and FoF Ecosystem

Within venture investing, VC funds and VC FoFs are the two 1. Knowledge Perspective
most prominent ways to allocate capital to startups indirectly. In asset classes like public equities, there is a well-developed,
Both follow a similar process: they begin with capital democratized ecosystem of knowledge. Research is abundant,
commitments from investors, draw down and deploy this analysts and media coverage are extensive, and data flows
capital over the fund’s investment period (typically 2–4 years), freely across platforms, down to retail investors. Technological
and eventually wind down over a 10–15 year lifecycle, innovations and new-age investment platforms have made
depending on external factors. direct investing in equities widely accessible and deeply
understood.
Before diving deeper, it's essential to understand the two
primary vehicles: VC funds and VC FoFs. To enrich this Venture capital is still a semi-opaque asset class
perspective, I interviewed three experienced FoF with high information asymmetry. Standardized
professionals (David Clark from VenCap and Jamie Rhode
d ata , p u b l i c ly ava i l a b le resea rc h , a nd
from Screendoor, and Frank Tanner from Morgan Creek
Capital Management), approaching the topic from multiple
unrestricted insights into startups and fund
angles. Their insights serve as valuable complements to the managers are scarce.
analysis presented in this section.
In contrast, venture is still a semi-opaque asset class with high
information asymmetry. Standardized data, publicly available
Understanding Venture Fund-of-Funds (FoFs)
research, and unrestricted insights into startups and fund
managers are scarce. The venture ecosystem lacks the broad
Venture FoFs introduces an additional layer of fund
transparency seen in public markets, making it difficult for
management: investors commit capital to the FoF, which then
many LPs and allocators to navigate independently. A FoF
allocates to a portfolio of VC funds according to its investment
structure can bridge this gap, offering curated expertise,
strategy. Let’s start by addressing the elephant in the room—
pattern recognition across vintages, and privileged insights
the topic of double fees. One of the most frequent critiques of
into a relatively less transparent space.
the fund-of-funds model is the "double layer" of management
fees and carried interest. While fee drag is a valid concern,
evaluating FoFs purely through the lens of costs is an 2. Expertise Perspective
incomplete view of their value proposition. Strong underwriting discipline and investment governance are
at the heart of long-term success. These characteristics ensure
fund managers stay true to their investment thesis and
In venture, the bene ts FoFs provide can
frameworks across market cycles. However, assessing these
outweigh the additional fees. These bene ts strengths from the outside is difficult. A great diligence process
include ecosystem knowledge, specialist demands the ability to judge not just track records but the
insights into diligence topics, and, perhaps most underlying processes, team dynamics, governance structures,
critically, access to VC managers that may and fund scaling plans.
otherwise be di cult for new or smaller
investors to reach. A great diligence process demands the ability to
judge not just track records but the underlying
In venture, the benefits FoFs provide can outweigh the processes, team dynamics, governance
additional fees. These benefits include ecosystem knowledge, structures, and fund scaling plans… Evaluating
specialist insights into diligence topics, and, perhaps most
these nuances requires specialized knowledge
critically, access to VC managers that may otherwise be difficult
and a deeply contextualized diligence
for new or smaller investors to reach. These benefits can have
more value for a specific type of LPs and allocators. We will framework—something a FoF is structurally
explore each of these value drivers—specialist knowledge, better positioned to provide.
ecosystem expertise, and manager access—in more detail in
the following sections.

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 SECTION – ALL THINGS FUNDS | INTERVIEW

Venture Fund-of-Funds: Established Managers

Snapshot of the interview with David Clark from VenCap

Rohit Yadav: David, thanks for joining us. From a fund-of-funds “We’re not macro strategists—we follow proven
(FoF) perspective, how do you approach strategic allocation to managers into new geographies like China and
venture funds? Is it only about past investment performance? India…. Stage matters to us because early-stage
David Clark: As an investor, we go back to first principles. The
takes a long time to return capital…. We manage
core question is: what are we trying to achieve by investing in
venture capital funds? Historical data tells us that the average
our portfolio’s duration by balancing early-
venture fund isn’t attractive—median returns are about 1.7x stage, growth, and secondaries.”
TVPI and a 9% IRR. We're not in venture for that. Our goal is to
consistently reach upper quartile benchmark—we’re talking
2.5x multiples and high teens, 20% IRRs. That’s our bar. Rohit Yadav: You mentioned stage earlier. How do you think
about early vs. growth-stage investing?
“The average venture fund isn’t something you David Clark: Unlike geography or sector, we do actively
want to invest in…. Our goal is to consistently manage stage exposure. Venture takes a long time — the
average fund lasts longer than the average U.S. marriage. It’s
hit and beat the upper quartile benchmark….
often 10–15 years before you see meaningful liquidity from
We don’t think about the VC industry by
early-stage funds. So we aim for a roughly 50/50 split between
geography or sector—only slightly by stage…. early and growth-stage investments. We also include
The best way to deliver consistent performance secondaries to help manage duration and generate earlier
is to back the same great managers again and liquidity. It’s incredibly hard to get a top 1% company. If you
again…. We’re not trying to pick the best fund in have one, ride it. We advise our managers not to sell
a vintage—we're trying to deliver consistently prematurely. We’d rather manage the duration at the portfolio
top quartile returns.” level by diversifying across stages and including secondaries.

Rohit Yadav: Do you believe there are other ways to "win" in

Rohit Yadav: So how do you actually construct such a high- venture beyond your approach?
performing portfolio? David Clark: Concepts of alpha and beta in venture are
David Clark: It’s about identifying managers who consistently nuanced. The asset class is power law-driven—1% of
back the top 1% of companies — fund after fund. And crucially, companies generate over 50% of exit value. Aggregate
they must generate fund-returning outcomes from those industry return is closer to the upper quartile than to the
investments. We don't get bogged down in geography or median. So capturing "venture beta" — i.e., top quartile—is a
sector. Stage matters a bit, but we’ll come back to that. strong result in itself. Chasing alpha by trying to consistently
pick top decile funds adds risk. Some LPs overestimate their
Rohit Yadav: Let’s talk geography. You’re active in the US, ability to select winners. One family office we know takes a
Europe, China, and India. How did you decide to enter these more honest approach: they try to "index" early-stage by
markets? backing managers with minimal portfolio overlap. That gives
David Clark: We don’t invest in managers just because they them exposure to broader Seed market and its aggregate
approach us — we haven’t done that in 20 years. Instead, we return.
track which managers are backing top 1% companies. That
gives us a list of 30 to 40 managers. From there, we filter: some “Capturing the 'beta' of venture—i.e., top
are too big to produce fund-returning outcomes. Others are quartile—is already very good…. Chasing alpha
inaccessible. Eventually, we’re left with five to ten realistic in venture can layer in additional risk…. The
targets we can build relationships with. In terms of entering more you chase alpha, the more you might
new geographies, it wasn’t a top-down strategy. We followed underperform in venture.”
managers we already backed as they expanded into China and
India. That gave us exposure while also helping us build local
expertise.

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Rohit Yadav: The VC asset class is expanding, but your model markets, less so. But the long-term trend is clear — they’re
is highly selective. Doesn’t that leave a lot of capital gaps? becoming more acceptable in venture, like in private equity.
David Clark: I see it differently. From an LP perspective, our
job is to generate strong, consistent returns. Most VCs we talk Rohit Yadav: For a first-time LP, how would you explain the
to say the issue isn’t capital shortage — it’s a shortage of risks of a FoF model?
world-class founders. When capital is scarce and time is David Clark: First, understand the power law. 60% of
plentiful, venture works best. When the reverse is true — like in companies don’t return capital. You need exposure to the top
2021 — you get capital inefficiency, inflated valuations, and 1% — that’s non-negotiable. Many new LPs start by investing
poor outcomes. directly — that’s a mistake. The odds are stacked against them.
Also, don’t be seduced by compelling narratives. Most VCs are
Rohit Yadav: A theme I’m exploring: “startups should be impressive storytellers, but few are truly exceptional. And don’t
harder to start but easier to build.” Could that help "de- let ego get in the way. Some LPs want weekly chats with their
power" the power law? managers. We speak with ours two or three times a year — we
David Clark: It’s an interesting theory, but I’d push back a bit. want them spending their time with founders, not us.
At the seed stage, it’s almost impossible to predict which
startups will succeed. You want a wide funnel of experiments. Rohit Yadav: Do family offices and institutional LPs ask you
The best managers are great at allocating follow-on capital to different types of questions?
winners as they emerge. Execution is everything. You need David Clark: Yes. Family offices can move faster and often
founders willing to commit 10 years of their life. have specific, personal reasons for investing. Institutional LPs
have more layers — impact reporting, ESG requirements, fee
“Secondaries will grow long-term, even though constraints. For example, many UK pension funds are capped
they’ll uctuate with market cycles…. Our on fees, which makes it hard to access top-tier venture.
secondary strategy is quality- rst, not discount-
rst…. Big secondary players often can't access “There’s no way to force top-tier access—it’s
top-tier funds—we can because we’re already in about long-term trust and alignment….
them." Common sense doesn’t work in venture—it's
often inversely correlated with being right…. If
you can’t access the best companies or funds
Rohit Yadav: Let’s go deeper into secondaries. What’s your directly, work with someone who can…. Don’t
strategy there and how do you differentiate from secondary- be seduced by narratives—great storytelling
focused funds? doesn’t always mean great returns.”
David Clark: VenCap actually started as a secondary firm back
in 1989. We focus on buying LP interests in venture funds —
not direct stakes in startups. Historically we’ve been Rohit Yadav: As we wrap up, what do you think about the
opportunistic, but we recently hired someone to institutionalize future of the emerging manager ecosystem?
this part of the business. Our core secondary thesis mirrors our David Clark: I don’t think venture is a single, monolithic asset
primary strategy: we want exposure to top 1% assets. Buying class anymore. It’s already segmented. The best managers can
at a discount isn’t our goal — quality is. Our best secondary still operate across stages. But yes, we’ve seen expansion,
ever was bought at a premium because it contained a especially during the boom years. Now we’re in a reversion
company now worth $40–50 billion and is public. phase. Some first-time funds won’t raise a second. But I do
think the long-term opportunity set is growing. Technology is
Rohit Yadav: How do you compete with the large secondary eating more of the economy. Startups are capturing more of
funds? GDP. So while power laws will persist, both early-stage
David Clark: Many top managers don’t allow secondaries experimentation and later-stage predictability will offer great
outside their LP group. Because we’re already inside, we often opportunities.
get first look. Plus, our valuation approach is different. Most
big players apply a normal distribution lens. We assume 70%
of companies are worthless and focus on the top 30%. And our
portfolio insights — through our primary relationships — give
us an edge in pricing.

Rohit Yadav: Do you think the secondary market will remain as

vibrant if VC liquidity/DPIs returns?
David Clark: I think secondaries will always wax and wane with David Clark
the cycle. In tight liquidity periods, they’re crucial. In looser Chief Investment O cer
VenCap

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Venture Fund-of-Funds: Emerging Managers

Snapshot of the interview with Jamie Rhode from Screendoor

Rohit Yadav: Jamie, thank you for joining us. Let's begin with Rohit Yadav: Why do you think that gap exists?
the basics. What is Screendoor, and what makes it unique? Jamie Rhode: It’s a combination of market conditions and
Jamie Rhode: Screendoor was started in 2021 by 10 human behavior. Nobody gets fired for investing in IBM, right?
established venture capitalists who recognized a white space in There’s career risk in backing Fund I or Fund II GPs without
the market. Emerging managers (EMs) needed not just capital established DPI. But that’s also the opportunity. The real
but guidance and mentorship. That’s where Screendoor comes innovation risk in VC isn’t backing a Fund I—it’s ignoring it.
in—we provide anchor capital and pair each manager with one Most brand-name funds were Fund I’s at some point. Skip the
to two of our GP advisors. Today, we have 14 such advisors. early vintages and you’re likely locked out later. I’ve seen this in
Our goal is to back first institutional funds. We invest in new public markets and hedge funds too—there’s always a
fund managers who operate in pre-seed and seed in North consolidation phase after explosive growth.
America. What we really look for is the manager’s lived
experience—something that gives them an edge in sourcing, Rohit Yadav: You emphasize enduring firms. Do you segment
selecting, and winning deals. If that edge doesn’t come EMs internally—by fund size, strategy, geography?
through clearly, we pass. Jamie Rhode: We avoid hard-and-fast rules. Venture punishes
rigidity. A $15M Fund I might be more “institutional quality”
“We back rst institutional funds, not rst-time than a $50M one, depending on the GP’s experience, strategy
investors…. Being ‘emerging’ doesn’t mean alignment, and ability to build a durable firm. We ask: Can this
person crawl, walk, run? Do they understand operational needs
inexperienced—it means untapped…. Emerging
like LPACs, tax reporting, portfolio construction? We’ve backed
managers aren’t struggling because they
Fund Is, IIs, and IIIs. Median fund sizes rise predictably—$30M
underperform—it’s LP comfort bias.” for Fund I, $50M for Fund II, $60M for Fund III. But since 2023,
fund sizes have been shrinking. That’s reflective of the
fundraising environment. Still, being “emerging” to us doesn’t
Rohit Yadav: Mentorship from GPs is a core part of your mean inexperienced—it means untapped.
model. How have EMs responded to this?
Jamie Rhode: The response has been very positive. Founders
“The innovation risk in venture isn’t backing
deal with real-life situations—breakups, deaths, reporting
issues—and our managers get access not just to me and my
Fund I—it’s ignoring it…. Most brand-name rms
partners but also to seasoned VCs who’ve been there and started as Fund I’s…. We avoid hard and fast
done that. It’s a safe, nonjudgmental support system. We're rules—venture punishes rigidity.”
backing people looking to build enduring firms—whether that’s
staying under $50 million or scaling to $500 million over time.
Rohit Yadav: How do you think about thematic exposure—AI,
Rohit Yadav: The term “emerging manager” gets used a lot climate? Do you tilt your portfolio based on trends?
but can mean different things. Can you paint a data-driven Jamie Rhode: I’d ask questions if I didn’t see AI in a deck—it’s
picture of this ecosystem? everywhere. But we’re not tactical. We think in multi-vintage,
Jamie Rhode: Definitely. In 2010, there were about 1,000 VC long-term terms. You want exposure to all the sectors of today
funds in the U.S. By 2024, that number has exploded to over and tomorrow. If you lean in too heavily on one hype cycle, you
3,600. Over 1,200 of those were Fund I vehicles launched since risk overconcentration.
2021. Screendoor has reviewed over 1,000 of those Fund Ones
—that’s about 90% of PitchBook’s stat. The median fund size Rohit Yadav: Can you index venture?
we see is around $30 million. The average is closer to $95 Jamie Rhode: If you could build an ETF of early-stage venture,
million, largely due to some larger spin-outs we evaluate. But you'd capture the mean return—which is highly attractive. The
here’s the catch: despite the number of fund launches, access mean return across startups is about 90% correlated to top
to capital hasn’t scaled. EMs only raised 15% of total capital, quartile—so statistically, if you invest in a large enough sample
even though they accounted for 45% of launches. That number set, you’ll likely capture the mean or top quartile. But access is
is dropping further. the real challenge. That’s where fund-of-funds come in.

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“You can’t lean too heavily into one sector like Rohit Yadav: Debate one: specialist vs generalist?
AI—you risk hype cycle exposure… We want Jamie Rhode: It’s a mixed bag. We see both. Specialists can
create exposure risks in hype cycles. If you only back FinTech
consistent vintage year exposure to all sectors
and that sector crashes, your outcomes suffer. That said, some
of today and tomorrow…. If you could index
sectors—like climate—might require specialization. But
venture, you’d capture the mean—which is near generalists with unique networks can still find breakout
top quartile.” founders. EMs, in a way, are specialists by nature. They often
have fresh access—to a founder network, a geography, or a
platform like the Thiel Fellowship—that legacy firms don’t.
Rohit Yadav: What should LPs expect from early stage focused
EMs in terms of risk, returns, and liquidity?
“Fund-of-funds o er access, infrastructure, and
Jamie Rhode: Higher dispersion, more volatility—but also
higher upside. Early-stage venture offers significantly more
portfolio support…. Family o ces love the shine
return potential than late-stage. Think 5-8x higher historically, of VC but often underestimate the back o ce….
depending on the vintage. But you need to size it properly— E M s a re n’ t s t r u g g l i n g b e c a u s e t h ey
it’s illiquid and longer duration. And not all volatility is bad. underperform—it’s LP comfort bias.”
Some of it is upside volatility. That’s the beauty of dispersion—
you can actually compound capital meaningfully if you choose
well. That said, EMs need support. They may lack experience Rohit Yadav: Debate two: Are there too many EMs?
in exits or DPI strategy. That’s where our GP advisors step in. Jamie Rhode: There are a lot, but many are undifferentiated.
During the ZIRP years, the bar was too low. At Screendoor, we
Rohit Yadav: For LPs who want exposure, how should they ask: What gives you the edge to spot non-consensus
think about fund-of-funds, especially with extra fee layer? opportunities and be right? But we always need more high-
Jamie Rhode: In most asset classes, fund-of-funds don’t quality EMs. The established GPs who helped start Screendoor
outperform net fees. But in early-stage VC, the dispersion is so wanted to fund their competition—to keep the ecosystem
wide that a good FoF can beat direct strategies—even net of healthy.
fees. You also get help with sourcing, diligence, and back-
office. We’ve had family offices come in thinking they can do it Rohit Yadav: So the bar to start a VC fund should be higher,
alone, only to realize they’re buried in K-1s and missing but it should be easier to build it after starting?
reporting deadlines. We provide structure and access— Jamie Rhode: Exactly. There’s room for Fund Zeros and part-
especially when check sizes are larger than many fund sizes. timers, especially for certain LPs. But to build an institutional
firm, yes, the bar needs to be higher. That’s why Screendoor
Rohit Yadav: What kind of questions do you typically get from exists—to help fund managers make that leap.
family offices?
Jamie Rhode: Many want to be close to innovation. They’re Rohit Yadav: Are we entering a world where more EMs shut
drawn to VC for the returns and the excitement. But the back- down?
office, compliance, and reporting realities hit hard. That’s why Jamie Rhode: Some are maturing faster. Others are shutting
we encourage our LPs to invest directly alongside us. down sooner. This is why operational due diligence matters—
Screendoor can't be the only LP on a cap table. We need LPAs, succession planning, LPAC setup. When things go
partners who share our conviction in this part of the market. wrong, that stuff is crucial. The shakeout isn’t just about capital
scarcity—it’s about operational maturity. The managers who
Rohit Yadav: Where do you think we are in the cycle? What’s treat Fund I like Fund IV will win. Only 20% of early-stage funds
the outlook for EMs in the next 1-2 years? deliver a 3x or greater. If you’re locking up money for 10–15
Jamie Rhode: Fund I closings are down almost 50%. years, you need to be in the right funds.
Established firms dominate—raising 80% of recent capital. The
macro environment, public market drawdowns, DPI slowdown,
and exit droughts have created friction. But this is also a
sorting mechanism. Durable firms will survive. LPs who stay
active now are likely to access the best vintages in a decade. I
think secondaries will play a bigger role. Managers need to
think strategically—if you’re sitting somewhere between 500
million and 1.5 billion valuation, you don’t need to necessarily Jamie Rhode
wait for the big exit to return your fund. Partner
Screendoor

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Private Markets Allocation: Investment

Advisor Perspectives
Snapshot of the interview with Frank Tanner from Morgan Creek Capital Management

Rohit Yadav: Frank, great to have you. What is Morgan Creek Frank Tanner: Alternatives help create a more balanced and
Capital Management, and how has it evolved? sophisticated portfolio. They offer diversification, uncorrelated
Frank Tanner: Thanks, Rohit. Morgan Creek was founded in returns, and the potential for alpha. But beyond return, families
2004, spun out of the UNC Endowment, and we carry that often value the impact and purpose—venture gives them
endowment DNA—also with roots in Notre Dame, Stanford, exposure to cutting-edge innovation and technologies aligned
and Duke. Today, we manage capital for a range of clients— with their values. It becomes more than just capital
from high-net-worth individuals and family offices to large deployment; it becomes involvement in shaping the future.
institutions like pensions. We've become increasingly
specialized, especially in early-stage venture capital, but we “Families also want investments that align with
also invest across the broader private markets—real estate, their values or o er impact…. Being part of
energy, buyouts, you name it. innovation is important for a lot of our clients…
A long-term view is almost a prerequisite for
“We’re much more specialized now across
venture…. You can’t be tactical in early-stage
thematic areas and areas of conviction…. We
venture—it needs to be programmatic.”
want to expand access to the early-stage
segment of the venture asset class…. Venture is
still hard to navigate for many individuals and Rohit Yadav: Let’s talk strategy. When a family office is thinking
smaller institutions.” long-term versus tactical, how do you guide them?
Frank Tanner: Venture, by nature, demands a long-term view.
You can't tactically trade venture capital. Sure, there might be
Rohit Yadav: Within that broad spectrum of alternatives, what’s some tactical plays at later stages—say, pre-IPO—but early-
your primary focus these days? stage investing must be approached programmatically. It’s
Frank Tanner: It’s primarily venture capital. On my side, I focus about building relationships and committing to a long horizon.
on early-stage venture—sub-$100 million funds, usually fund I, The key is partnering with the right managers and keeping
II, or III, mainly pre-seed and seed. Separately, we also have consistent exposure through vintages.
Morgan Creek Digital, which invests directly into blockchain
infrastructure and digital assets—this was spun out from our Rohit Yadav: So where do you see the most promising
fund investing and thesis-building work dating back over a opportunities within private markets?
decade. Frank Tanner: We think early-stage venture is compelling. It
offers asymmetric upside driven by power-law dynamics. In
Rohit Yadav: Who are your LPs, broadly speaking? early-stage, return dispersion allows you to actually generate
Frank Tanner: By investor count, it’s mostly individuals and alpha. That’s less true in later-stage or multi-stage venture
families. But by dollar volume, it’s institutions. Our discretionary where returns are more normally distributed and volume can
funds are typically anchored by public pensions, while our non- dilute alpha. So we favor the high-variance early bets—
discretionary mandates lean more toward single and multi- especially if you can pick the right managers.
family offices and affiliated foundations.
Rohit Yadav: What’s your approach to portfolio construction
Rohit Yadav: Looking ahead, where do you see Morgan Creek within venture?
in the next three years? Frank Tanner: Our focus is on aggregating exposure to smaller
Frank Tanner: I hope we keep building our reputation and funds—solo GPs, former operators, emerging managers at
brand in the early-stage ecosystem. A lot of individuals and fund I, II, or III—who write the first checks into companies pre-
smaller institutions haven’t been able to access venture product market fit. We never recommend just one or two
meaningfully. We want to continue unlocking that segment— micro-VCs; that’s too risky. But in a basket, the mean return can
democratizing access to early-stage innovation. be quite attractive, and alpha through manager selection
becomes additive. This plays well with a barbell strategy: have
Rohit Yadav: Why are alternatives, especially private markets, beta exposure through multi-stage platforms, and then stack
becoming essential in portfolio construction for HNWIs and upside via early-stage bets.
family offices?

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Rohit Yadav: How do you compare FOs’ views on PE vs VC? “In venture, consistency is key—innovation is an
Frank Tanner: Traditional PE can sometimes feel capped in evergreen opportunity… We use a rst-
terms of upside, especially when you’re dealing with market
principles framework—our 5 S’s: source, select,
efficiencies and financial engineering. In early-stage, upside is
secure, support, and signal… Whether you’re a
more compelling if you’re willing to take the risk. Exposure is
fundamentally different—it’s innovation, not leverage. specialist or generalist, if you’re executing on
those 5 S’s, we’re interested.”
Rohit Yadav: What are LPs currently expecting from venture in
the short-to-mid term?
Frank Tanner: I don’t think there’s a consensus. We’re still Rohit Yadav: Should family offices do direct startup
working through a reset. But if you look ahead three to five investments or leave that to experts?
years, I expect IPO window to reopen, exits to return, and Frank Tanner: Depends on the family. If they have the network,
further consolidation among larger multi-stage funds. There’s a operating history, and infrastructure to execute, great. But if
bifurcation playing out, which creates opportunity at both not, they risk adverse selection. We always ask: why are we
ends. seeing this deal? If it’s a truly proprietary look, maybe. If it’s a
broad syndicate, maybe not. Partnering with funds is a great
way to add network and context.
“When you aggregate a basket of micro VCs,
the mean return can be quite attractive… Multi- Rohit Yadav: Let’s go into the early-stage ecosystem. Where
stage strategies o er diversi cation but lose are we now?
some of the upside asymmetry… We don’t Frank Tanner: Valuations are relatively reasonable—typically
recommend investing in just one or two micro high single digits to $20 million post. There’s a negotiation
VCs—it’s too risky.” between how much a founder wants to dilute and what they
need to reach the next milestone. We’re seeing a clear divide
—legible vs non-legible founders. Those who “pattern match”
Rohit Yadav: Then why are some LPs holding back? get capital easier. But for VCs, the real opportunity is backing
Frank Tanner: It’s backward-looking sentiment—DPI has been the non-consensus founders who prove themselves and then
low, valuations compressed, exit markets frozen. But ironically, get snapped up by larger funds later on.
this is a much better time to allocate than 2020-21, when
everyone was piling in at peak valuations. Founders today are Rohit Yadav: How are you approaching venture allocations in
more serious. Valuations are reasonable. For those with dry this environment?
powder, this is a great time. Frank Tanner: We’re constructive. Fundraising is hard for
everyone right now, including allocators. But we see
Rohit Yadav: So it’s really about consistency in allocation, not opportunity, and we’re increasing activity. Last year, most
timing the market? capital flowed to 30 large firms. We think micro VCs are
Frank Tanner: Exactly. You don’t want to miss a vintage. This underappreciated—yet they’re often the source of alpha for
asset class requires duration. Venture is network-driven. If you bigger funds down the line.
take a break, you lose access and context. Innovation doesn’t
stop, so your exposure shouldn’t either. Rohit Yadav: Frank, this was an incredible conversation. Thanks
for your time and all the insight on how venture fits in
Rohit Yadav: Let’s touch on some classic debates. Specialists portfolios and the nuanced strategies within early-stage VC.
vs generalists—what’s your take? Frank Tanner: Thank you, Rohit. Really enjoyed the discussion
Frank Tanner: We don’t take a hard stance. Our approach is and appreciate the work you’re doing in this space.
first-principles based—we evaluate every manager on five S’s:
source, select, secure, support, and signal. Whether you’re a
generalist or a specialist, if you’re executing on those five,
we’re interested. It’s less about what’s hot and more about
structured execution.

Rohit Yadav: And emerging vs established managers?

Frank Tanner: We’ve ended up doing a lot with emerging
managers—not because we set out to, but because that’s
where the alignment and hunger often are. Across the Frank Tanner
platform, about 75% of our investments have gone to Director
emerging managers. You avoid some of the strategy drift and Morgan Creek Capital Management
AUM-driven mindset that can come with later-stage funds.

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 Section 7
On the Ground

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All Things Startup Fundraising

Selective Optimism, Thematic Shifts, and a Rebalanced Investment Landscape

Global venture fundraising rebounded in early 2025, with funding volumes rising 54% YoY in Q1
—signaling renewed investor confidence. The U.S. maintains leadership. India’s recovery contrasts
with China’s ongoing investor retreat. AI remains the dominant fundraising theme, commanding
premium valuations despite lower deal volume. Valuation recovery is top-heavy, favoring top-
quartile startups, while broader deal activity remains subdued. Seed-stage capital is increasingly
concentrated, and timelines to Series-A have lengthened.

Meanwhile, over 40% of unicorns remain private for nine years or more, straining VC fund cycles.
Europe is gaining ground in deal sizes, and early-stage revenue stabilization offers cautious
optimism amid slowing late-stage growth.

Topics covered in this section:

1. Global Fundraising Perspectives

2. Asian Fundraising Perspectives
3. AI Fundraising Boom
4. Valuations
5. Deal Dynamics
6. Unicorns and Startup Performance

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On The Ground
Selective Optimism, Thematic Shifts, and a Rebalanced Investment Landscape

We’re observing several emerging trends and nuanced Valuation Recovery Remains Uneven: Top-quartile
patterns in fundraising data across the venture landscape. startups are driving most of the valuation rebound, while mid-
Unsurprisingly, AI continues to dominate—All Things AI and lower-tier companies continue to face stagnant or
remains the hottest segment in terms of both fundraising declining valuations, underscoring a bifurcated market.
activity and valuations.
Deal Count Continues to Decline: Both Asia and North
At the same time, we’re seeing a measured recovery in deal America saw sharp drops in deal count volume—down 22%
sizes and valuations, albeit unevenly distributed across stages and 48% respectively YoY—pointing to increased investor
and geographies. While headline metrics may not directly caution and intensified capital selectivity.
inform the next specific investment decision, they are highly
relevant for investors taking a longer-term, strategic view of the Series-A Timelines Are Lengthening: While elite startups
venture asset class. When viewed through a macro lens, this still raise Series-A rounds quickly, the average time from Seed
data offers significant value—highlighting directional shifts, to Series-A has increased materially, driven by greater investor
capital flows, and market sentiment. diligence and emphasis on financial discipline.

While headline metrics may not directly inform Seed Capital Becomes More Concentrated: Larger seed
the next speci c investment decision, they are rounds (> $5M) now command a growing share of total seed
highly relevant for investors taking a longer- capital, marginalizing sub-$1M rounds and creating barriers for
term, strategic view of the venture asset class. smaller or first-time founders.

Geographic Valuation Gaps Persist: U.S. seed-stage

Here are ten strategic trends shaping the venture startups are valued at roughly twice those in Europe, with
regions like DACH commanding higher premiums within EU
investment landscape today:
space—highlighting persistent global valuation disparities.
Global Venture Fundraising Rebounds in 2025: After two
years of contraction, global venture capital fundraising posted India's Resilience Amid Regional Divergence: India’s 8%
a 54% YoY increase in Q1 2025, signaling revived investor YoY fundraising growth and stable deal activity in 2024 contrast
confidence and an improving capital deployment environment. sharply with China’s 43% funding drop, reflecting a regional
divergence in investor sentiment and macroeconomic
U.S. Maintains Fundraising Leadership Despite Relative confidence.
Gains Elsewhere: The U.S. remains the global leader in
venture capital by volume and deal count, but emerging Global Investors Pulled Back from China: Cross-border
markets like India are gaining relative momentum, especially capital into China has declined to decade lows, reinforcing
when normalized against GDP. long-term concerns around regulatory risks and geopolitical
tensions, while India has seen record-high relative deal flow.
AI Dominates Fundraising Themes: AI startups are
Unicorn Aging, Challenges VC Return Timelines: Over
capturing disproportionate capital inflows, reflecting a thematic
40% of unicorns have remained private for nine years or more,
overweight by VCs, even as deal share remains relatively
straining the traditional 10-year VC fund model and raising
modest—suggesting conviction is concentrated in fewer, larger
concerns about exit optionality and liquidity timelines.
bets.

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 Section 8
A Things Exits

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All Things Exits

From Power Law to Patience: Venture’s Exit Equation is Being Redrawn

The venture landscape is undergoing a profound shift, as macroeconomic headwinds expose the
ecosystem’s reliance on public market exits. Once a robust engine for value creation, IPOs have
slowed dramatically, driving exit liquidity to decade lows and challenging the traditional venture
playbook.

From 2017–2019, exits outpaced investment—today, that dynamic has reversed. Although M&A
and secondaries are emerging as alternatives, structural hurdles remain. Q1 2025 saw glimmers of
optimism, notably Google’s acquisition of Wiz, but it’s unclear if this signals a lasting trend.

The data highlights shrinking exit volumes, scarcity of billion-dollar outcomes, rising sub-1x
returns, and evolving global dynamics—from India’s IPO boom to private equity encroachment.
Investors must recalibrate strategies to adapt to this fragmented and maturing exit environment.

Topics covered in this section:

1. Ten Strategic Exit Trends

2. Overall Exit Dynamics
3. All Things M&As
4. All Things IPOs
5. Tariffs and Macro Impact on Exits

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All Things Exits

From Power Law to Patience: Venture’s Exit Equation is Being Redrawn

As shown in the ‘Venture Value Chain’ slide (Link), we’ve Large-Scale Exits Are Scarce, Creating Ecosystem
entered a new era where macro forces are reshaping outcomes Bottlenecks: The absence of billion-dollar exits is stalling
across the venture model–especially exits. Exits remain the capital recycling and startup momentum, putting pressure on
ecosystem’s most significant vulnerability. In the pre-2020 late-stage valuations. Need to reassess liquidity assumptions
period—particularly from 2017 to 2019—exit volumes and consider secondaries or M&A as alternative exit paths.
consistently outpaced investment. Today, that dynamic has
reversed, pushing liquidity in venture space to decade lows. The Power Law Is Brutal: Most Early Exits Deliver Sub-1x
Returns: An increasing share of startups are exiting at a loss
Macro shifts challenges the traditional venture (0–1x MOIC), particularly at earlier stages. This underlines the
playbook, where scaling toward a public market need for sharper diligence and valuation discipline in early-
stage investing.
exit was the primary path to value creation. That
model is breaking down. If IPOs are no longer
Europe’s Unicorn Exit Market Is Slowly Rebounding, but
the reliable endgame, the industry must rethink Caution Persists: While select unicorns have exited
its exit strategies—elevating M&A and successfully, many face valuation resets, making Europe’s exit
secondary sales as viable alternatives recovery fragile. Stakeholders must recalibrate expectations
and extend runway planning in light of volatile investor
The charts in this section highlight just how stark the decline in sentiment.
exits has been, especially on the IPO front. Macro shifts
challenge the traditional venture playbook, where scaling Opaque Acquisition Terms Obscure True Market
toward a public market exit was the primary path to value Dynamics: Only 16% of VC-backed acquisitions disclose
creation. That model is breaking down. If IPOs are no longer pricing, limiting market transparency. Investors should
the reliable endgame, the industry must rethink its exit advocate for clearer benchmarking to improve comparative
strategies—elevating M&A and secondary sales as viable analysis and deal pricing models.
alternatives. But making that transition is easier said than done.
Early-Stage Acquisitions and Acqui-Hires Are Shaping
While Q1 2025 brought a standout moment with Google’s the New Exit Playbook: A shift toward Pre-Seed and Seed-
acquisition of Wiz, it remains unclear whether this signals a stage M&A reflects demand for talent and speed over scale.
broader shift or is simply an exception. I highlight below nine Startups should position themselves as acquisition-ready
strategic trends that have been unfolding over several years. through focused capability development and team branding.
Please note that this report primarily focuses on long-term
trends—measured in years—rather than short-term patterns IPO Backlog Signals Latent Liquidity—but Patience Is
spanning a few months to a couple of years. Required: More companies are IPO-ready than ever before,
but are holding off due to market uncertainty. Fund managers
For a detailed quarterly analysis on exits, check out The Big should brace for pent-up supply once favorable conditions
Book of VC–Q1 2025 edition (Link). return, and startups should time their bridge fundraising
accordingly.

Ten Strategic Exit Trends Market Demands Greater Financial Maturity for IPO
Candidates: IPO thresholds have risen sharply, with revenue
IPOs Remain the Cornerstone of Venture’s Power Law and profitability now taking centre stage. Founders should shift
Returns: Despite being fewer in number, IPOs drive the lion’s toward operational rigor earlier in their journey to meet
share of exit dollar volume, reinforcing their outsized investor expectations.
importance in generating fund-returning outcomes. Investors
should still align for such IPO events given the power law India’s IPO Surge Forces to Rethink Listings Strategies:
dynamic of venture business, though also take care of the India’s booming IPO scene is prompting founders to reconsider
macro regime and other factors discussed in the report. domestic listings and corporate domiciles. Global funds should
track such migrations closely and develop more localized
investment theses based on macro analysis.

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 Section 9
Secondaries

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Secondaries
The Future of Venture Flows Through the Secondaries Market

Venture capital secondaries are rapidly transitioning from a niche, misunderstood corner of the
market to a central pillar of the ecosystem. Once viewed as reactive tools for distressed sellers,
secondaries now serve strategic purposes—offering liquidity, enabling portfolio rebalancing, and
unlocking capital velocity. With growing investor demand, new platforms, and the rise of GP-led
transactions, the market is expanding and evolving.

Despite pricing opacity and structural complexity, secondaries can offer compelling returns
through discounted, de-risked exposure to mature assets. As major venture firms and tech-
enabled platforms enter the space, secondaries are also driving the democratization of venture
investing. Looking ahead, they will play a pivotal role in reshaping capital allocation, deal
structuring, and access across the venture landscape.

Topics covered in this section:

1. The Rise of Secondaries

2. Key Features and Market Dynamics
3. Interview: Exploring Secondaries: Private Stock Insights
4. Interview: Exploring Venture Secondaries Fund
5. Why Secondaries? A Framework for Thinking
6. Ecosystem Shifts: Normalization, Recycling, Constraints, and Innovation
7. What’s Next?

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Secondaries
The Future of Venture Flows Through the Secondaries Market

The Rise of Secondaries Key Features and Market Dynamics

Secondaries are no longer a side note in venture—they are Market Size: The global venture secondaries market is
rapidly becoming central to how the ecosystem evolves, estimated to be valued between $100–120 billion. However,
operates, and optimizes capital. Yet, the term “secondaries” this figure refers to the potential market size, not actual
remains opaque for many in the venture world. Misunderstood transaction volume. In 2024, recorded transactional volume
and often dismissed, secondaries have traditionally been through brokerage platforms was approximately $1.6 billion,
viewed as niche, reactive transactions—a tool for distressed though the true volume, including private and direct deals, is
sellers or LPs needing liquidity. That perception is changing likely in the $3–5 billion range (Link). Given the private nature
fast. of these transactions and the lack of mandatory reporting,
accurately tracking total market activity remains challenging.
Misunderstood and often dismissed, The U.S. continues to lead the overall secondaries space—
secondaries have traditionally been viewed as accounting for ~66% of global activity (check graph below) —
mirroring broader trends across the private markets.
niche, reactive transactions—a tool for
distressed sellers or LPs needing liquidity. That
perception is changing fast.

GP-Led Transactions Completed by Geography. Source: Lazard (Link)

Venture’s Share of Secondaries: While buyout secondaries

still represent the lion’s share (~70% of transaction volume),
venture secondaries are catching up, comprising about 8-10%
of activity as of 2024 (check out the graph below). As more
Illustrative chart. LP=Limited Partner, GP=General Partner. late-stage portfolios mature and the IPO window hopefully
Source: Elements derived from Industry Ventures (Link) narrows in Q2 2025 and 2026, this figure is expected to rise.

Now, secondaries are rapidly moving to the forefront of the

venture conversation. There are three different kinds of
secondaries, as seen above in the chart. Market headlines now
feature a wave of new dedicated secondary funds, GP-led
transactions aimed at boosting DPIs, LPs selling off positions,
strip sales, mega secondary fundraises, and employees
monetizing their vested shares through specialized platforms.
As investor interest in venture continues to grow, fund
managers increasingly view GP-led secondary structures as
% of Transaction Volume–Split by Strategy. Source: Evercore (Link)
powerful tools to provide liquidity, extend the holding periods
of high-potential assets, and diversify their LP bases. Today, it’s
Pricing: In 2024, pricing for venture and growth secondaries
no longer a question of whether secondaries matter in venture
recovered, reaching 75–85% of NAV—closely aligning with
—it’s a question of how profoundly they will reshape the
long-term historical averages. Venture secondaries typically
ecosystem moving forward.

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Exploring Venture Secondaries Fund

Snapshot of the interview with Rando Rannus from Siena Secondary Fund

Rohit Yadav: Rando, thank you for joining us today. Let’s start We're seeing demand now because fund vintages from the
with a bit about your journey and why you launched Siena. 2010s are maturing. Liquidity pressure is rising, especially with
Rando Rannus: Thanks, Rohit. My journey started in consulting the exit market stalled. In just Central Eastern Europe, the
in the early 2000s, then I exited my own startup in the 2010s. startup market cap is about €100B, and the estimated annual
About five years ago, I joined forces with two other GPs who liquidity need is 2–3%, or €2–3B. That alone makes
had deep experience in investment banking and early VC in secondaries a meaningful market.
Central Eastern Europe (CEE). We saw early-stage venture
becoming crowded, valuations rising, and investors looking for Rohit Yadav: So the company secondaries are well-
liquidity. That’s when we did one of the first secondaries in established, but GP/LP secondaries are just getting started?
Bolt, and in 2021 we institutionalized this by launching a Rando Rannus: Exactly. For a long time, it wasn’t even
dedicated VC secondary fund—Siena. acceptable for a founder to sell shares pre-exit. But in the last
10–15 years, especially in the U.S. and now in Europe, that
Rohit Yadav: What’s the investment focus at Siena, and what’s mindset has shifted. Founders taking some chips off the table
your vision over the next 3–5 years? can actually align incentives better with investors and take
Rando Rannus: We focus on company-level secondaries for bigger risks.
scale-ups originating in Central Eastern Europe and the
Nordics—think founders or tech teams from these regions, but "Secondaries in venture were rare in Europe
companies that are global in nature. We don’t do LP stakes or until recently, but the need for liquidity is
continuation funds; the market isn’t ready for that yet. Most growing fast…. If GPs have a home run, they
older funds were backed by single LPs like EIF or local
prefer to hold onto it — but this is changing now
government FoFs, so there hasn’t been much pressure for LP
liquidity. But we believe that in the next 3–5 years, that will
with DPI pressures.”
change, and we may start looking into those structures too.
Currently, we target companies with at least €10M in annual
Rohit Yadav: Let’s look at it from an LP’s perspective. Why
revenue, growing 50%+ annually, and valuations north of
invest in a secondary fund like yours?
€100M. Our ticket sizes are between €1–5M, which puts us in a
Rando Rannus: Traditional early-stage VC is a “box of
relatively empty mid-market space—too large for angels, too
chocolates”—you never know what you’re going to get. It’s
small for firms like Industry Ventures or Goldman Sachs. Our
high-risk, high-reward. Secondaries offer more transparency—
counterparts are founders, early employees, and angels—not
you know the companies, the metrics, the cap table. That’s
typically GPs.
attractive for LPs new to the asset class.

"Company-level secondaries are where we see In fact, in our first fund, half of our LPs were first-time VC
the biggest opportunity today…. In some cases, investors. They saw this as a more predictable way to enter
VC funds are still in their rst or second venture. Historical data backs this up: only 1% of secondary
generation — mostly backed by single LPs like funds fail to return 1x, versus 25% for early-stage funds. Plus,
EIF or government fund-of-funds.” we have a shorter fund life—7 years vs. 10–12 years—and still
target 20–25% IRRs, similar to early-stage VC.

Rohit Yadav: Can you explain the three major types of Rohit Yadav: Why do you think the mid-market secondaries
secondaries—company-level, GP-led, and LP-led—in the space is so empty in Europe?
European context? Rando Rannus: Honestly, I’m not sure. But we're seeing more
Rando Rannus: Sure. Secondaries started with private equity, funds pop up—Danish, Swiss, and others. In the U.S., big firms
and only recently moved into venture. Europe is still following like Sequoia and Accel have legally restructured to invest more
the U.S. model with a lag. Company-level secondaries have into secondaries. That’s a clear sign. Europe is catching up, and
existed for years—founders, angels, and employees selling I think we’ll see more players entering this space soon.
stakes. But GP-and LP-led secondaries are very new, especially
in Europe.

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Rohit Yadav: What are the biggest trends you foresee in Rohit Yadav: Let’s talk about deal-making. What are the key
secondaries over the next few years? challenges in executing a secondary deal?
Rando Rannus: The market is splitting into two parts. On one Rando Rannus: The biggest one is access to information. If you
side, you have big names like Stripe, SpaceX, OpenAI—where don’t have visibility into the company’s numbers, team, and
secondaries happen at a premium to the last round. On the cap table, you shouldn’t do the deal. Yet we still see investors
other side, there’s everyone else—where discounts still apply, buying through layers of syndicates without any info—
and if you do your homework, you can find great opportunities. especially in hot sectors like AI. Ideally, we work directly with
That’s why we love focusing on CEE. There’s a clear lack of founders and management, get welcomed onto the cap table,
liquidity providers, and we can capitalize on that inefficiency. and build a relationship. No spray-and-pray approach.

"It used to be frowned upon for founders to sell Rohit Yadav: How do you mitigate risk within a deal?
pre-exit — now it’s seen as healthy…. Taking Rando Rannus: Start with deep due diligence: understand the
company’s growth, the cap table, the share class you’re buying,
chips o the table helps founders stay
and who’s driving the exit. We also structure deals thoughtfully
motivated and aligned with investors."
—if a new round is coming, we might close the deal now but
agree to adjust the price when the round finalizes. You can also
structure downside protection or upside-sharing clauses. But
Rohit Yadav: Are LPs showing more excitement about
even plain-vanilla discounts work if the last round was recent.
secondaries than investing in regular VC?
Rando Rannus: Globally, the secondaries market hit $120B last
year and is growing 15–20% annually. LPs are definitely "Access to company information is the biggest
interested, especially because secondaries allow for capital deal-making challenge…. Some investors are still
recycling when IPOs are frozen. And yes, firms like StepStone doing 2021-style blind bets, especially in AI —
and Industry Ventures are raising massive secondary funds. we avoid that."
They know the playbook and can scale it fast.

Rohit Yadav: Zooming in on your region, what’s the secondary Rohit Yadav: How concentrated is your portfolio?
activity like in CEE? Rando Rannus: In Fund I, we had 10 companies. In Fund II,
Rando Rannus: In CEE, startup market cap is €100B with at we’re planning for 15. It’s a concentrated approach compared
least €2–3B annual liquidity need. But there are few buyers. to early-stage VC. Since we’re closer to growth equity, we
That gap creates opportunities. You see names like Elevenlabs already know the trajectory of these companies and can make
in Poland and Vinted doing large, oversubscribed tenders— larger bets. We also double down—Bolt, for example, we’ve
sometimes at premiums. Then you have companies like Bolt, invested in every year for the past four years. If it keeps
which has consistent secondary activity but is still waiting for delivering, why not?
the right IPO window.
Rohit Yadav: Rando, thank you so much. This was a
"The secondary market today is split — top masterclass in understanding secondaries, especially from a
names like OpenAI and Stripe get premiums, European and CEE perspective. Best of luck building Siena.
Rando Rannus: Thanks, Rohit. Really enjoyed this. And yes,
others trade at discounts…. It’s not logical to
secondaries are not just about liquidity—they’re about
only focus on the 20 top-name companies — maturing the ecosystem.
there’s value in the long tail."

Rohit Yadav: You've mentioned a few times the "divide"—

premium for top names, discounts for the rest. Is this
sustainable?
Rando Rannus: I don’t think it’s ideal. In theory, most
secondaries should happen at a discount because you’re not
buying the latest preferred shares, and you’re providing
liquidity. But the demand for “brand name” companies has
Rando Rannus
General Partner
skewed the market. That’s where we see our alpha—we focus
Siena Secondary Fund
on underappreciated but solid companies that others are
overlooking. For example, Bolt trades at a discount in
secondaries, but our analysis suggests it’s already worth more
than its last round.

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Exploring Secondaries: Private Stock Insights

Snapshot of the interview with Sim Desai from Hiive

Rohit Yadav: Sim, welcome! Can you start by introducing Hiive U.S.—that have limited M&A activity. Combine that with name
and the vision behind it? recognition of tech companies and limited exits, and you’ve
Sim Desai: Thank you, Rohit. It’s great to be here. Hiive is a got a recipe for a strong secondary market. There’s massive
liquidity management platform for private companies and their demand for shares in these companies, but no public exit. So
shareholders. We help private companies offer liquidity to their naturally, secondary trading fills that void.
shareholders in an automated and centralized environment—
with proper controls, a secure and regulated process. Investors Rohit Yadav: Speaking of demand, a lot of executives and
in private securities can also come to Hiive to explore pre-IPO employees want to sell their vested shares. How big is that part
opportunities. of the market?
Sim Desai: It’s grown immensely. Traditionally, there was
The inspiration for Hiive came from observing how chaotic the stigma around selling your shares—it was seen as disloyal or a
secondary market had become by the late 2010s. Originally, lack of alignment with the founder. But that made sense only
private market secondaries gained traction with Facebook and when IPOs were viable exit routes. Now that many companies
Twitter around 2013. Over time, this market grew rapidly but are electing to remain private longer, employees holding stock
also became fragmented, with brokers running around with no for 7–10 years without liquidity is not sustainable.
centralized system and no oversight. It was clear that private
company shares—like shares of Uber, for example—could We’re now doing about $200 million per month in transaction
benefit from central price quoting, like public stocks. We volume. And interestingly, our studies show that employees at
believed the entire process was ripe for automation. companies who allow liquidity rate their employers more
favorably. They’re actually more likely to stay and recommend
“Back in 2011, private securities trading began their workplace. So the idea that secondary sales reduce
taking o with companies like Facebook and alignment is flawed.
Twitter…. By the late 2010s, the secondary
market had become chaotic, fragmented, and “A lot of private companies now choose to stay
lacked oversight.” private; they don’t want to go through the rigors
of becoming public…. Employees have vested
stock but no way to monetize it, and many have
Rohit Yadav: Hiive is focused on company secondaries, but the been holding it for 7–10 years.”
broader secondary market includes GP and LP secondaries
too. Can you walk us through that landscape?
Sim Desai: Sure. The traditional secondary market in private Rohit Yadav: So how does tech reshape this market?
equity primarily dealt with fund interests—specifically LP and Sim Desai: Two major trends are emerging. First, from a tech
GP-led secondaries. LP-led secondaries involve the trading of perspective, companies need tools to manage the entire
investments in funds by limited partners, and GP-led transaction process—tracking, executing, signing agreements,
secondaries involve the GP, or general partner, bringing in new exercising options, and so on. We automate all that. Second,
capital to offer liquidity to LPs while continuing to manage the on the market side, consolidating fragmented liquidity pools is
fund. Company secondaries, which are our focus at Hiive, deal key. Private markets are inherently illiquid, so centralizing
with the actual portfolio companies held by these funds. So we activity leads to better pricing and outcomes. We partner with
facilitate transactions in the shares of these companies. My external brokers and offer generous terms to ensure more
own background started in LP secondaries, so I've seen the activity comes to Hiive. We envision becoming market
evolution firsthand. infrastructure, like an exchange, with brokers as participants.

Rohit Yadav: Company secondaries have gained more Rohit Yadav: So brokers and platforms can co-exist?
attention recently. Why is that? Sim Desai: Absolutely. Brokers won’t go away. They’ll continue
Sim Desai: Historically, startups either succeeded and went to play a role—they’ll operate on platforms like Hiive. It’s
public or failed. But over the last decade, we’ve seen highly similar to how public exchanges evolved from market makers
valuable startups stay private longer, often without any exit. into infrastructure. We’re already seeing this trend play out.
There are also regulatory barriers—like antitrust rules in the

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Rohit Yadav: Where does the market stand in terms of Rohit Yadav: Hiive’s ‘2025 State of the Private Market’ report
efficiency? Has it matured enough? mentioned-“marketplace dynamics are shifting in favor of
Sim Desai: It’s not yet an efficient market. Buyers often sellers.” What does that mean?
participate across platforms. Sellers, especially employees, are Sim Desai: In illiquid markets, when the number of buyers
one-time participants and may not shop around. So liquidity is increases and sellers are scarce, buyers end up bidding higher.
fragmented. Consolidating market activity into a central pool That’s what we saw through much of 2024. Public markets were
will help. We’ve made great strides in automating the process, rising, creating a bullish sentiment. Recently, though, things
but there’s still work to do in terms of end-to-end efficiency. have cooled, and we’re seeing momentum tilt back toward
buyers.
“The market is not yet fully e cient—there are
fragmented pools of liquidity and inconsistent Rohit Yadav: Do you think this liquidity will broaden, or will we
always see a few hot names dominating?
pricing… A lot of sellers are one-time
Sim Desai: I think the market will continue to broaden. Five
participants, so they’re not as sophisticated or
years ago, I wouldn’t have believed we’d see 300 companies
price-sensitive as recurring buyers.” traded on one platform. The market is still dominated by 20–
30 names, but that’s changing. Liquidity and pricing will
improve as companies themselves support liquidity. Allowing
Rohit Yadav: Are there dedicated funds targeting company
shareholders to share high-level KPIs—without giving away
secondaries?
sensitive data—can help companies attract buyers, reduce bid-
Sim Desai: Yes, but not traditional VCs—they're typically
ask spreads, and even command premiums.
limited to investing 20% of their capital in secondaries.
However, many secondary funds, crossover funds, and hedge
“In 2024, we saw a strong tilt toward a seller’s
funds operate as Registered Investment Advisors (RIAs) and
can actively trade. Some large VCs are even converting to RIAs market. That’s now reversing due to public
to access this market more freely. market slowdowns.”

Rohit Yadav: Let’s talk bid-ask spreads. What are you seeing
on the platform? Rohit Yadav: That transparency must encourage more investor
Sim Desai: More liquid companies—like those in our Hiive 50 participation too?
index—have tighter spreads, sometimes as low as a few Sim Desai: Exactly. Transparency has many forms. Price
percent. For less liquid names, spreads can go above 20%. discovery is one—we want to get to the point where rational
And for some securities, there’s no spread at all because price charts exist for private companies. Transparency around
there's no market. Since our inception, we’ve executed closed performance metrics is the next frontier. High-level indicators
trades in over 300 different companies. On a quarterly basis, like revenue growth don’t compromise competitive
about 50 companies are actively trading. positioning, but they help investors make informed decisions.

Rohit Yadav: Looking ahead, if markets improve, IPO windows

“For liquid securities, you may see spreads as
open, what happens to secondaries?
low as a few percent. For illiquid ones, spreads
Sim Desai: Liquidity will increase. In a bullish market, buyers
can exceed 20%…. Yes, premiums do exist— chase sellers, driving prices up. Sellers see those gains and are
especially during bull markets when companies more willing to transact. So ironically, secondary market activity
outperform their last valuation round.” rises in good times, not bad. If IPOs return, we’ll likely see
more pre-IPO demand and more sellers entering the market at
attractive prices.
Rohit Yadav: What about premiums? Are some stocks trading
above last round valuations? Rohit Yadav: Thank you, Sim, for such a comprehensive
Sim Desai: Yes. In bullish times, especially, many hot names conversation. Wishing you and Hiive continued success.
trade at premiums to their last round. If a company raised nine Sim Desai: Thank you, Rohit. It was a pleasure.
months ago and has grown significantly since, you’d expect its
stock to trade higher. Even in today’s tougher market, some of
these AI sectors still command premiums.

Sim Desai
CEO, Hiive

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 Section 10
Venture Capital 3.0

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 SECTION – VENTURE CAPITAL 3.0

Venture Capital 3.0

What’s Driving the Shift, How It’s Unfolding, and What Are the Bene ts

Venture capital is no longer a fringe strategy—it’s evolving into a core, institutional asset class.
What began as a niche, network-driven domain is now defined by transparency, operational rigor,
and global reach. From sovereign funds and pension LPs to AI-powered diligence tools and
valuation governance, venture is adopting the discipline of private equity while retaining the
dynamism of early-stage innovation.

As global innovation hubs rise and best practices take hold, the ecosystem is becoming more
accessible, measurable, and scalable. The institutional era of venture isn’t coming—it’s already
here, reshaping how capital is formed, deployed, and returned.

Topics covered in this section:

1. What’s Driving the Venture 3.0 Shift?

2. How Venture 3.0 is Playing Out Across the Value Chain
a. Interview: Insights into Corporate Venture Capital
b. Interview: Rise of Tools for Private Markets
c. Democratisation of Venture Capital

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Venture Capital 3.0

What’s Driving the Shift, How It’s Unfolding, and What Are the Bene ts

Illustrative Analysis from The Big Book of VC, May 2025

We have entered Venture 3.0—the third and most Institutional capital is not just participating—it is shaping the
transformative era of venture capital. Its scrappy, founder- market through products, secondaries, and platforms that offer
driven roots in Silicon Valley defined the first era, where small venture exposure at scale. Wealth managers are building
partnerships placed high-conviction bets on disruptive venture sleeves for high-net-worth clients, while retail investors
technologies. The second era saw globalization and are gaining access through new vehicles like tech-platforms,
professionalization of the industry, marked by the rise of interval funds, syndicates, and retail focused venture funds.
megafunds, broadening of limited partners, and emergence of Regulatory frameworks are adapting to accommodate this
venture as a credible part of diversified portfolios. growth, and data infrastructure is catching up to support risk
modeling, benchmarking, and performance tracking.
Venture 3.0 marks a pivotal evolution in the industry. First,
venture has moved beyond its roots as a niche or alternative Venture is being systematically integrated into the machinery
play—it’s now viewed as a core component of portfolios, of capital markets. The same arc of institutionalization that
managed with the same discipline as more established asset defined public equities in the 1980s, real estate in the 1990s,
classes. Second, the landscape is transforming along two and private equity in the 2000s is now playing out in venture.
parallel paths: increasing institutional sophistication and But unlike previous asset classes, venture is evolving in a
broader accessibility, as venture becomes both more digitally native, globally connected, and innovation-
professionalized and more open to a wider set of investors. accelerated environment. Venture 3.0 is an infrastructure layer
for the next generation of economic growth.
Venture 3.0 marks a pivotal evolution in the
industry. First, venture has moved beyond its The same arc of institutionalization that de ned
roots as a niche or alternative play. Second, the public equities in the 1980s, real estate in the
landscape is transforming along two parallel 1990s, and private equity in the 2000s is now
paths: increasing institutional sophistication and playing out in venture capital.
broader accessibility.

Disclaimer: While the term Venture 3.0 has been used previously—primarily in the context of AI's emergence in the venture space—the author’s usage in this
report reflects a broader ecosystem perspective, encompassing all facets of the venture business.

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 SECTION – VENTURE CAPITAL 3.0 | INTERVIEW

Insights into Corporate Venture Capital

Snapshot of the interview with Nicolas Sauvage from TDK Ventures

Rohit Yadav: Nicolas, thank you for joining us. How do you see Second, it’s strategic. Our exploration job at TDK Ventures is to
the CVC landscape evolving over the next five years, especially help TDK learn where to go—and not go—in the future. If we
in the context of geopolitics and corporate financial strength? invest across diverse futures, we gather insights whether those
Nicolas Sauvage: Thanks, Rohit. To predict the next five years, bets succeed or fail. It’s about learning as much as it’s about
it's useful to look at the past five. What I’ve seen is that returns.
corporate VCs and financial VCs are starting to appreciate each
other more. This matters because ultimately, it's about Rohit Yadav: And, from long-term perspective, you follow
supporting entrepreneurs. Corporate VCs bring superpowers those trends while making sure that they are uncorrelated.
from their parent companies—things financial VCs can't. Nicolas Sauvage: That's good for corporate VCs who have an
Meanwhile, financial VCs bring financial discipline, strong exploration mission. You also have CVCs who have an
board support, and network access. exploitation mission, which is about engaging with startups
that can leverage your existing platform, your existing services,
Put both together on a cap table, and you're supercharging a your existing products. But in that case, it's more about
startup. Going forward, I see this cooperation deepening. That diversification of use cases, for example, or verticals. But you
said, not all CVCs are built equally. Many aren’t well designed still want to have enough financial diversification.
—but I see the good ones growing and best practices
spreading. My podcast, Corporate Venturing Insider, aims to “When money doesn’t come back, even
share these so more people can do CVC well—and, ultimately, corporates start asking for nancial returns…
so entrepreneurs benefit from better-aligned, more effective Uncorrelated bets de-risk your portfolio and
corporate investors.
expand your strategic insights.”
On geopolitics, venture capital requires forming hypotheses
about uncertain futures. That includes thinking about possible
Rohit Yadav: With supply chain localization and geopolitical
U.S. political shifts, the U.S.-China relationship, India’s role, or
shifts, how should corporates think about supporting CVCs?
what Singapore is doing well—like how Silicon Box chose
Nicolas Sauvage: First, we need to accept that we’ll get many
Singapore for its base. It’s key to build portfolios around non-
hypotheses wrong. That’s fine. The job is not to predict, but to
correlated hypotheses. For example, due to supply chain
imagine ideal futures—like clean nuclear fusion, fully electrified
concerns, there’s increasing interest in tech that reduces
homes, or flying vehicles—and backcast to today. We then
reliance on critical materials like lithium or cobalt.
identify gaps and support entrepreneurs working to fill those
gaps. That’s how we landed on investing in Peak Energy—a
“Corporate VCs and nancial VCs have started sodium-ion battery company—because we anticipated
to appreciate each other more over the past ve challenges with lithium supply. This mindset helps us navigate
years… Not all corporate VCs are well designed geopolitical challenges. It’s not about reacting to the news, but
—but the good ones are growing and best imagining the best possible outcomes and helping them
practices are spreading… CVC is all about become reality.
making non-correlated hypotheses about the
future.” “CVCs with an exploration mission learn from
successes and failures… CVCs with an
exploitation mission engage with startups to
Rohit Yadav: You’ve used this term "non-correlated bets." leverage existing products and platforms.”
Could you explain what you mean in the CVC context?
Nicolas Sauvage: Sure. There are two reasons to invest in non-
correlated areas. First is financial: venture is governed by Rohit Yadav: Do you expect more corporates to launch their
power law dynamics—most outcomes are zero, but a few own CVCs? Or will they shift toward fund-of-funds and other
return 50x or 100x. So, de-risking with uncorrelated structures?
investments is critical. Nicolas Sauvage: Strategically, I believe any company with
over $1 billion in revenue and doing well cannot afford not to

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have a CVC. It's relatively inexpensive and can become a profit Rohit Yadav: And geographically—where do you see the most
center. TDK Ventures, for instance, has been profitable for past momentum in CVC?
four years. But you have to be patient—returns take time, often Nicolas Sauvage: I’m bullish on the U.S., hopeful for Europe,
7–10 years. CVC also delivers insights that can inform both and curious about China. But I’m bullish on India and
short- and long-term strategy. If you do it well, it becomes a Singapore. India’s entrepreneurial landscape has transformed.
supercharged business development or strategy unit.
The best talent is staying, joining startups. There’s this
“CVC can be a pro t center. We’ve been “Jugaad” mindset—innovation under constraints—which is
pro table for the past four years…. Fund-of- very aligned with what being an entrepreneur means. We’ve
already made three investments in India, and we’re looking to
funds give geographic access and domain
do more. CVCs can help Indian deep-tech startups with de-
expertise without building in-house teams….
risking, early go-to-market, and eventually global scale. That’s
Every CVC should do at least some direct our ambition with the TDK Ventures India team.
investing to truly learn from entrepreneurs.”
“Corporates operate under distribution law—
Rohit Yadav: How do CVCs look from a tactical standpoint— not power law—so you have to unlearn a lot to
direct investments versus fund-of-funds? do venture right…. In corporations, you rely on
Nicolas Sauvage: Direct investing is essential. It builds the consensus. In VC, you must be okay going
intimacy and learning loop with entrepreneurs. That’s hard to contrarian…. CVCs are fragile individually but
replicate through fund-of-funds. However, fund investing can resilient as an ecosystem.”
be a great starting point—especially for geographic access
(say, Israel or India) or deep domain expertise (like quantum or
crypto). You might invest $2–5 million and get access to top Rohit Yadav: That’s a powerful vision. One final question:
minds who give you strategic insights for your business. So, Where do you see gaps where CVCs can actually outperform
while I believe in direct investments, fund-of-funds can serve traditional VCs?
important tactical purposes. Nicolas Sauvage: CVCs can be fragile—many get shut down—
but as an ecosystem, they’re resilient and patient. When done
Rohit Yadav: Let’s talk about stage focus. You invest early at poorly, CVCs are worse than financial VCs. But when done well,
TDK Ventures. Do you see regional differences in how CVCs they can be better than even the best financial VCs.
invest across US, Europe, and Asia? The challenge is ensuring more CVCs are built right. No one
Nicolas Sauvage: It all depends on the CVC’s mission. For sets out to build a bad CVC—they just often lack coaching.
exploration, like us, early stage makes sense—Seed or Series A That’s why I’m so grateful to GCV and mentors like Paul
—because the market and tech are both nascent. For Holland and Pete Moran, who helped me learn the craft. I now
exploitation missions, Series B or C is more appropriate try to pay it forward through my podcast—sharing real,
because the startup has proven its tech and market. actionable best practices.
Also, we shouldn’t overlook regions like Brazil, Africa, and
Occasionally, we invest in later-stage startups that are doing broader South America. With democratized tools like AI and
something new internally—a pivot or new product. But those blockchain, and the falling cost of compute, entrepreneurs
are exceptions. We call all our investments "projects" instead everywhere now have a shot. That’s why we backed Groq—
of deals, to honor the life mission of these entrepreneurs. their founder Jonathan Ross wanted to make the cost of
Regionally, I think venture is about risk-adjusted pricing. You compute zero. If that happens, everyone wins.
need to balance the potential upside with the risks—and as a
CVC, bring your mothership’s superpowers to reduce those Rohit Yadav: Nicolas, thank you for this masterclass in CVC
risks. thinking—deeply insightful and inspiring. Really appreciate
your time.
Rohit Yadav: What are those corporate “superpowers”? Nicolas Sauvage: Thank you, Rohit.
Nicolas Sauvage: They vary—but might include deep tech
expertise, regulatory knowledge, global distribution channels,
or just the credibility that comes with a major brand. These can
help a startup de-risk their path significantly.

But corporates think differently than VCs. I wrote about this—

corporations operate under a distribution law, where most
outcomes are good. VC is governed by power law. In VC, you Nicolas Sauvage
need to unlearn consensus-based thinking and get President
comfortable backing bold, even contrarian, bets. TDK Ventures

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Democratisation of Venture Capital

Snapshot of the interview with Michael Motschmann from MIG Capital

Rohit Yadav: Welcome Michael! What is MIG Capital? Rohit Yadav: How has your portfolio evolved over the years?
Michael Motschmann: MIG is a Munich-based venture capital Michael Motschmann: Naturally, VC is full of ups and downs.
firm investing in deep tech, particularly life sciences like We've had failures—biotech companies where drugs didn’t
biotech, diagnostics, medtech, digital health, and also tech work—but also great successes. Our most known success is
areas tied to energy savings and semiconductors. We’re BioNTech, the leader in COVID-19 vaccines, founded with us in
focused on investments that contribute to a better world and 2008. It was originally an oncology company. Before that, we
industrial efficiency. Our main geographic focus is the German- backed Ganymed, another biotech startup, which was sold to
speaking region—Germany, Austria, Switzerland—but we also Astellas for up to €1.3 billion. The drug developed is now
invest in broader Europe. changing stomach cancer treatment. That’s impact, not just
financial but also for humanity.
“We started MIG in 2004, more by accident
than by plan…. At that time, venture capital in Rohit Yadav: That’s an incredible story. Can you elaborate on
MIG’s impact-driven investing philosophy?
Germany was in a very tough situation after the
Michael Motschmann: Our goal is impact through technology.
Neue Markt collapse…. Our rst fund was €30
Take BioNTech: billions vaccinated, a massive global health
million, raised from private individuals, not impact. But also in semiconductors, we helped build a
institutions.” company from scratch with Harvard postdocs that cut wafer
production costs by over 50%. We sold it to Infineon, and now
it's enhancing European chip manufacturing. This is the role of
Rohit Yadav: MIG is on Fund 18, correct? Tell us about the VC: start from zero and build transformative companies.
journey.
Michael Motschmann: Yes, Fund 18. MIG started in 2004, “Germany historically relied on banks for
somewhat by accident. I was a serial entrepreneur, and my
business funding, not venture capital…. VC is
accountant invited me to sit on board of a venture capital firm.
At that time, VC scene in Germany was devastated post the
still relatively young in Germany compared to
2000-2001 Neue Markt crash. But with some capable partners, the U.S…. In the U.S., it’s natural to take early-
we raised capital from private investors and launched MIG. Our stage risk – here, not so much.”
first fund was in 2005, a modest €30 million. Now, we’re
closing Fund 17 at €110 million and actively raising Fund 18.
Rohit Yadav: That brings us to venture capital as a risky asset
Rohit Yadav: Unlike many VCs, your LP base is retail investors. class. How do you see Germany’s culture towards risk?
How does that work? Michael Motschmann: Germany historically leaned on banks
Michael Motschmann: That’s our distinguishing feature. Our for funding. VC didn’t take root here like in the U.S., where VC
capital comes from private individuals investing between €10K has been around for nearly a century under various names. In
to €1 million. We have a separate fundraising firm solely the U.S., it's normal to take risk on early ideas. Here, it was
dedicated to placing our funds. We fundraise continuously family and friends, or a bank loan. That began shifting in the
while investing, making this a cycle business. It's quite different 80s, post-Basel regulations. Banks became stricter. VC
from the typical VC model with a few large institutional LPs. emerged as a substitute, but it still lacks deep roots.

“Unlike most VCs, we raise money from retail Rohit Yadav: What’s your five-to-ten year vision for MIG?
Michael Motschmann: Stay successful, and grow the role of
investors – people who invest €10,000 to €1
VC in Germany. We want more people investing in VC.
million…. We have a separate fundraising
Germany needs it to stay competitive. Our universities and
company continuously placing our funds while scientific institutions are world-class. If we fund the ideas
we invest.” coming out of them, we can build the future. We aim to be a
key player in mobilizing private capital into deep tech startups.

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Rohit Yadav: Let’s dive into democratization of VC. You Rohit Yadav: What do you expect in terms of VC returns and
pioneered bringing retail LPs into this world. Why? exit environment in the near future?
Michael Motschmann: At the time, institutional investors Michael Motschmann: The macro economy is rough, but this is
avoided German VC due to poor past experiences. We saw the time to invest. You get reasonable valuations and high-
potential in giving everyday investors access to VC with smaller quality teams. VC is long-term—exits happen in 7-10 years. If
tickets. Typical VC funds have million-euro minimums. We you buy well now, returns will follow. Stock markets are starting
offered a chance to participate with €10,000. It’s an investment to bounce back, and interest in deep tech and health remains
option, a portfolio diversifier, and a way to back national high.
innovation. Plus, people couldn’t access startups directly; we
offered a managed, professional vehicle. “Europe must become more economically and
technologically independent…. We can't rely on
Rohit Yadav: How have institutional LPs evolved in Germany
the U.S. or China for all our technology needs….
over time?
VC has a role to play in building a sovereign
Michael Motschmann: They follow returns. If VC isn’t hot, they
pivot to PE or Infrastructure. German institutions often prefer European tech ecosystem.”
US VC funds because of long track records. There's also risk
aversion. The ecosystem lacks depth here. That’s why we turn
to retail. We educate and onboard investors who are curious, Rohit Yadav: Finally, is venture a trend-following business? And
patriotic, or simply diversifying. what role does AI play?
Michael Motschmann: Venture isn’t just trend-following.
Trends matter, but it's about long-term vision. AI won’t replace
“Democratization of VC is crucial – people
VC. It’s a tool, not a substitute. We use AI in drug discovery, as
should be able to participate with at BioNTech with InstaDeep. It accelerates science but doesn’t
€10,000….Traditional VCs often require €1 replace the human judgment, the fantasy, and the genius—
million minimums – we broke that barrier…Retail needed to create game-changing companies.
investors can diversify, support innovation, and
learn through our funds…Institutional LPs follow Rohit Yadav: Michael, thank you. From MIG’s founding story to
trends – if VC is cold, they shift to Private Equity your mission of democratizing VC, to your insights on Europe’s
future—this has been a masterclass in venture capital.
or Infrastructure.”
Michael Motschmann: Thank you, Rohit. I believe deeply in
VC’s power to shape a better society. It was a pleasure sharing
Rohit Yadav: Among family offices, insurance firms, and this with you.
pension funds, who’s most engaged with VC?
Michael Motschmann: Family offices led by entrepreneurs are
most responsive. They understand risk. The next generation,
less so. Insurance firms and pension funds are constrained by
regulation. Even a 1-2% allocation from them could change the
game due to sheer volume. But right now, rules are tight.
Michael Motschmann
Rohit Yadav: What are the strategic expectations from the
Managing Partner
German VC ecosystem in the next few years? MIG Capital
Michael Motschmann: It’s tough to predict due to geopolitics
—the Ukraine war, U.S. policies, global instability. But it’s clear
Europe must become more independent. That means funding
our own companies, building our own digital and defense
infrastructure. We can’t depend on others for tech or capital.
It’s about sovereignty. Venture capital is key to that.

Rohit Yadav: So VC isn’t just about returns, but strategic

autonomy?
Michael Motschmann: Absolutely. If we want strong European
firms in AI, defense, biotech, we need to fund them ourselves.
We can’t rely on Nasdaq or the U.S. capital markets. We need
a European capital market structure, stronger IPO pathways,
and collaborative growth.

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Rise of Tools for Private Markets

Snapshot of the interview with Eric Woo from Revere

Rohit Yadav: Eric, great to have you. Could you share the Rohit Yadav: Let’s zoom out. Why are private markets
origin story of Revere and the mission you're trying to solve? becoming such a portfolio priority?
Eric Woo: Thanks, Rohit. The mission really emerged from my Eric Woo: There’s the math behind diversification and returns,
time as an institutional allocator. Despite having staff and sure. But there’s also human emotion. Private markets used to
analysts, the process was still highly manual, and the data feel exotic. Now, they’re exciting. Yields from private credit can
usage was inefficient. My co-founder, Chris Shen, came from beat treasuries. Next-gen family offices want a piece of venture
the family office world—different LP flavors, same frustrations. —it’s social, strategic, and emotionally engaging. We’re at the
So we built Revere with a simple mission: to bring greater tail end of democratizing access, and the mainstream is just
transparency through data and to automate the manual. AI getting started.
now allows us to do this better than ever. Ultimately, it’s about
helping investors make faster, better, and smarter decisions in "The short-term opportunity is de ning the data
private markets. lake—centralized, normalized, connected….
Longer-term, public and private data will
"Private markets are by default private, so
converge—and we’ll see the next Bloomberg
ine ciencies and opacity are built into the
terminal born…. Friction is the biggest barrier—
system…. We’re moving from ip phone to
both front-o ce and back-o ce processes are
Blackberry—and the iPhone moment for
still painful."
software in private markets is just around the
corner…. AI is eating very meaningful parts of
how work ows are happening today.” Rohit Yadav: How has that access evolved—are we seeing it
just at the startup level?
Eric Woo: It’s everywhere now—funds, secondaries, private
Rohit Yadav: Where do you see Revere in the next three to five credit. AngelList made startup and fund investing accessible
years? for as little as $2,000. IRA regulations are opening up illiquid
Eric Woo: A year ago, I might've had a clearer picture. But AI investments. And wealth advisors at firms like Morgan Stanley
is evolving so fast, we’re now living through what I’d call the and Goldman Sachs now offer alternatives to clients as part of
“flip phone to Blackberry” phase of software. Around the the core portfolio. It’s more institutionalized.
corner is iPhone moment for private market tooling—truly
transformative. So while I can’t say exactly what Revere will Rohit Yadav: Yet most of these new-age alternative investment
look like, I’m excited because we’re building right at that technology platforms are still small relative to the asset class.
inflection point. What needs to happen for real growth?
Eric Woo: The keyword is friction. Back-office processes in
Rohit Yadav: So you're staying focused on tools and private markets are painfully manual. In public markets,
transparency in private markets? everything is smooth—you log in, and it's all there. Private
Eric Woo: Absolutely. It starts with pristine data—aggregated, markets still lag behind. On the front end, it's death by a
normalized, refreshed. That’s the foundation. Once we have thousand paper cuts—so many small deals, each requiring time
good data, everything else follows: portfolio reallocation, new and effort. Reducing this friction—on both sides—is key.
investment assessments, and ultimately better returns with
lower risk. As more capital shifts toward private markets, the Rohit Yadav: And how are family offices adapting to this
demand for that infrastructure only grows. space?
Eric Woo: It comes down to sophistication. Some are very well
"There’s a human behind every investment staffed and capable of managing private portfolios. Others are
decision—AI can assist, but not replace that…. driven by FOMO—wanting to be in the next SpaceX. The
Portfolio tools need to evolve alongside their motivation—whether financial returns or strategic exposure—
shapes their entire approach to investing, access, and
users, not remain static…. As AI automates
reporting.
work ows, we need to reintroduce the human
and community layer."

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Rohit Yadav: That’s a good segue into tools and portfolio Rohit Yadav: And what’s AI’s top use case for GPs right now?
solutions. The ecosystem’s booming. Can you map the Eric Woo: It’s replacing analysts for basic tasks—research,
landscape for us? summarizing pitch decks, generating memos. It’s great for
Eric Woo: I recently worked on a market landscape exercise speed. But it doesn’t replace human judgment, especially in
that split the space into six or seven categories, each with 10 venture, where assessing a founder still needs that human
to 50 companies. Every step of the private investing workflow touch.
now has point solutions—from discovery, to diligence, to
analytics. It’s healthy, but also chaotic. Many of these Rohit Yadav: For LPs, you mentioned reliability. Anything else
companies will need to expand beyond their narrow focus or top-of-mind?
consolidate. Eric Woo: Reliability comes first. But also, the system has to
grow with them. If they want a new dashboard or a new report,
Rohit Yadav: Where is the most exciting growth? they want it in minutes—not months. The product has to
Eric Woo: Short-term: building the data lake. Everyone’s data evolve alongside their portfolio.
lives in silos—normalizing that is step one. Longer-term:
merging public and private markets into a unified interface. Rohit Yadav: Let’s close on the future. Where is this all going?
Think Bloomberg Terminal 2.0—except it’ll be AI-native, with Eric Woo: Ironically, as we automate more, we’ll need to
public and private data seamlessly integrated. That’s a massive reintroduce the human layer. Private markets were always
opportunity. about relationships. Software will scale the data and analytics,
but trust and access—those will always be human. The future
Rohit Yadav: What’s the investor’s top concern right now— will blend automation with community and human interaction.
discovery, infrastructure, something else?
Eric Woo: Discovery’s important, but what they really want is "Every few months, something interesting shifts
reliability. They want tools that work. If the data’s wrong one in in this tooling ecosystem…. Private markets
a hundred times, that’s catastrophic. LPs need confidence. And
require both software scalability and human
they want tools that evolve with them—new dashboards, new
judgment…. We’re building the infrastructure for
needs—they want flexibility, not rigid systems.
what’s coming next—at scale, with intelligence."
Rohit Yadav: How does geography factor in? Are the same
tools and needs seen across the U.S., Asia, and beyond?
Eric Woo: Needs are shaped more by sophistication than Rohit Yadav: Beautifully said. I love the concept of
geography, but geography still matters. For example, in Japan, “relationship alpha.” That blend of tech and trust is exactly
processes are still highly manual—Excel and pen-and-paper. what makes private markets so unique. Thanks for your time,
The threshold for pain is higher. But that’s changing. Adoption Eric. This was phenomenal.
curves vary, but the need for efficiency is global. Eric Woo: Thank you, Rohit. Great to be here.

"GPs are naturally curious—they're great

adopters of new tools and technologies…. LPs
are more methodical, but once onboarded,
t hey 're loyal a nd w i l l i ng to ex pa nd
relationships…. Reliability is the top expectation
from LPs. The tool must work—every single
time."

Rohit Yadav: Let's talk GPs versus LPs. Where’s the most tool Eric Woo
CEO, Revere
innovation happening?
Eric Woo: GP tooling is moving the fastest. GPs are curious
and under-resourced—they love testing new tools. Think AI-
driven deal screening, memo creation, scraping pitch decks—
it’s all booming. LPs are slower, more process-driven, but when
they commit, it’s high-stakes and high-reward. Their contracts
are bigger and stickier.

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Disclaimer: All paintings in the report are AI generated.

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