I'm not a SV resident, nor a startup kind of guy, but one thing I've noticed is that VC firms are hit driven. And when there are periods in time when hits are far apart, you end up with events like the Series-A crunch.
I'm wondering if there could be a VC firm that would emphasize a low cost of business (for them) in return for not so many hits, but rather a series of smaller firms that just get on base. They'd build a pool of talent, and one or more of the firms might hit it big (aka got lucky), but the VC would be more about spreading their bets, and having a strong base to generate recurring income. And with a possibility of synergy between the various firms under management. So -- more dividend oriented than IPO oriented.
> I'm wondering if there could be a VC firm that would emphasize a low cost of business (for them) in return for not so many hits, but rather a series of smaller firms that just get on base. They'd build a pool of talent, and one or more of the firms might hit it big (aka got lucky), but the VC would be more about spreading their bets
I think the management and vetting overhead isn't worth it for them. Maybe SV is more hit driven, but I've seen non-sexy start-ups raise small rounds of funding. You don't really hear about them though.
There are private equity funds that do this kind of thing at a slightly later stage. I think the window between a startup that burns fast enough that it needs a big exit and one that burns slowly enough to not need VC at all is pretty narrow though.
I'm wondering if there could be a VC firm that would emphasize a low cost of business (for them) in return for not so many hits, but rather a series of smaller firms that just get on base. They'd build a pool of talent, and one or more of the firms might hit it big (aka got lucky), but the VC would be more about spreading their bets, and having a strong base to generate recurring income. And with a possibility of synergy between the various firms under management. So -- more dividend oriented than IPO oriented.