Venture capital's new reality check: 'A ton of people looking to get out everywhere'
As venture capital boomed over the past decade, college graduates and MBAs flocked to the industry, hoping to source the next Airbnb or Uber. Would-be VCs scoured the internet for any publicized open roles, while savvy ones networked their way in. They believed that with hard work and relentless networking, they could become the next Michael Moritz.
But increasingly, over the past two years, this energy has dissipated. Investors — from analysts to partners — have grown increasingly frustrated and disillusioned.
2021 and 2022 made VC sexy, an early-stage associate said, likening the industry to fashion and entertainment. During the zero-interest-rate years, the ranks of the VC industry swelled, a trend that was supercharged by the pandemic. Money poured into the sector for the high returns promised by venture capital.
Established firms expanded their scope; early-stage firms began to try their hand at growth, and vice versa. Private-equity shops and hedge funds dipped into venture with crossover funds. Corporations flush with cash from record profits sought to make strategic investments. Firms multiplied, and investors struck out on their own.
