Investors are increasingly interested in smaller, more agile funds, according to a piece Venture Capital Dispatch. They are seeking a return to the founding days of VC, when former entrepreneurs ran the show.
Highlighted in the piece is New York’s Roger Ehrenberg, who raised $50 million for his new fund, IA Ventures, last year, even though he had $85 million in demand.
The smaller funds have shorter exit windows and thus more flexibility. As First Round Capital’s Josh Koppelman put it,
“When I hop on a train in Philadelphia I can either take the local or the express. I think most traditional VCs when they fund a company kind of buy an express ticket to an IPO. And I think what you’re seeing with some of these smaller funds, they’re buying a ticket on a local train. They’re going to the same destination – trust me, I want a billion dollar outcome just like anybody else – but our fund size allows us that when the doors open at a $50 million stop, or at a $200 million stop, or a $500 million stop along the way, we can sort of look around and say, ‘There’s smoke on the train, we need to get off.”
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