The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
20VC: VCs are Spreadsheet Monkeys and are Commoditised | Why Fees and Carry Misalign GPs and LPs | Why Founders Will Realise Multi-Stage Funds Damage Seed Rounds | Why We Need European Sovereignty More Than Ever with Taavet Hinrikus
Apr 28, 2025
Taavet Hinrikus, Partner at Plural and co-founder of Wise, discusses the commoditization of venture capital and why traditional VCs often miss the mark. He critiques the 2:20 fee structure, arguing it misaligns interests between GPs and LPs. Taavet emphasizes the need for founders to be wary of multi-stage firms impacting seed rounds negatively. He also highlights the urgency for Europe to build its own tech infrastructure amidst geopolitical challenges, focusing on fostering independence and resilience in the tech landscape.
58:26
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Quick takeaways
- Venture capital is increasingly seen as commoditized, necessitating changes in fee structures to align investors with long-term entrepreneurship goals.
- Having venture capitalists with operational experience significantly enhances their ability to evaluate founders and identify growth potential in early-stage investments.
Deep dives
The Commoditization of Venture Capital
Venture capital is increasingly viewed as a commoditized product, with many investors following a cookie-cutter approach to investing. The discussion highlights how traditional management fees may not align VCs with the long-term outcomes of their investments, prompting calls for change in fee structures. By charging lower management fees, some firms believe they can foster better alignment with founders and back more ambitious projects. This shift aims to ensure investment firms remain focused on backing true entrepreneurial ambition rather than simply generating short-term financial returns.
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