The Truth about Venture Capitalists (in 2007) · a16z News
Business, Finance & Industries · Mar 25, 2026
The essay argues that the single VC partner, not the firm brand, is usually the most important fundraising choice because value and governance flow through that individual relationship, so founders should evaluate partner-specific capabilities, backgrounds, and track records (by asking that partner's founders) rather than rely on firm prestige.
The Truth about Venture Capitalists (in 2007) · a16z News
Business, Finance & Industries · Mar 25, 2026
By 2007 venture capital deployment stayed high despite weak returns—breaking the usual cycle where poor performance shrinks funding—and producing an overcrowded market with many firms chasing few attractive investments.
The Truth about Venture Capitalists (in 2007) · a16z News
Business, Finance & Industries · Mar 25, 2026
By 2007 venture capital had become an institutional asset class—large endowments and foundations adopted top-down allocation policies (influenced by David Swensen) that kept steady, sizable capital flowing into VC (average 3.5% allocation in 2006), so despite poor returns from 2000–2006 the old boom–bust self-correction failed and too much money chased too few good deals.
The Truth about Venture Capitalists (in 2007) · a16z News
Business, Finance & Industries · Mar 25, 2026
VC fund structure forces pursuit of ~10x returns in a 4–6 year window, favoring highly scalable, “hockey stick” businesses and often rejecting otherwise healthy or profitable startups that lack rapid, large-scale leverage—so rejections frequently reflect model mismatch, not poor business quality or founder merit.