News Summary

The venture capital industry is facing significant challenges as funds are now lasting much longer than expected, creating liquidity issues for limited partners (LPs). At a recent panel in San Francisco, LPs managing over $100 billion highlighted the extended lifespan of venture funds, with some lasting 18 to 20 years. This has forced LPs to reconsider their allocation models, often turning to the secondary market to manage liquidity. Despite the difficulties, there are opportunities emerging, particularly for well-established managers, while new fund managers struggle in the current fundraising environment. The rise of AI and the changing valuation landscape has added complexity, with many startups facing significant markdowns from their 2021 valuations. The panel also discussed the normalization of general partners (GPs) selling shares in secondary markets, not just at distressed prices but also at premiums. New fund managers are advised to connect with family offices and offer co-investment opportunities to gain traction. The panel emphasized the importance of access to founders and the ability to adapt to evolving networks and expertise.