VCs Eat Their Young: $900M Fund Devours Small Startups

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    The VC "Chosen Ones" Get Ahead in 2024: Industry Giants Continues to Dominate Funding Round

    In a shocking yet hardly surprising turn of events, industry-leading venture capital firm Industry Ventures is further solidifying its grip on the lucrative funding landscape. The once-insular club of established investors appears to be widening its members to include a select few elite players, while the already scarce opportunities for emerging managers appear destined to dwindle. Industry Ventures’ latest $900 million early-stage hybrid fund offers further proof of this trend.

    Back in 2021, Industry Ventures bagged a $575 million venture from limited partners, and things seemed to be looking up. In less than three years, their assets under management have ballooned to an astonishing $8 billion – mostly thanks to their knack for buying stakes in emerging VC funds and directly investing in promising companies at the Series B level. To put it bluntly: other VCs are struggling, even as Industry Ventures snags the cream of the crop while onlookers are left scrounging for scraps.

    Here are the "rules" of getting access to this exclusive club: emerge, if you can at all, with a fund size larger than $250 million, and focus only on backing seed and Series A startups in markets that are deemed "high-tech" enough. Industry Ventures loves seeding the next big thing among fresh-faced founders, but is perfectly happy to invest in established entities where the risk is lower but still has the potential for massive return-on-investment.

    Meanwhile, an select few experienced investors defect from larger firms to start new adventures, and Industry Ventures gobbles them up, minted with the stamp of approval it awards to those deemed worthy to lead.

    In the shadows, the landscape will continue to shift, reshuffled by the whims of the powers-that-be. As the dust settles on industry giants like Industry Ventures making inroads, the rest fight a losing battle for scraps: over $8 billion in under- management, a testament to industry dominance.

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