Low interest rates and a flood of fast dumb late-stage capital has jacked up artificial paper venture returns. This has had several effects:
First, it helped convinced LPs to flood the sector with capital in search of these unsustainable returns. LPs are not blameless in the bubble collapse we're living through.
Second, it convinced GPs of their own self-delusions by making venture investing look and feel a lot easier than it really is. This is hard. But it hasn't felt hard for a long time.
Third, it has convinced GPs and LPs of the flawed idea that venture can be scaled. This has never worked and it isn't working now, but the pressure to deploy coupled with a rising tide lifting all boats has driven an endless set of "let's scale venture" attempts.
Evidence of this is all around us. Nearly every VC fund/platform has scaled beyond its capacity to effectively deploy capital against its strategy or expertise.
I'm tempted to list them all, but it's literally every part of the ecosystem from over-inflated platform funds to single GPs; operator funds to accelerators; from premature promotion of investment professionals w/ zero mentorship to enormous debut funds with no differentiation...

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