Firewall with Bradley Tusk How the Middle Fell Out of Venture Capital
Dec 2, 2025
Explore the shifting landscape of venture capital, where only small or massive funds thrive. Discover the innovative equity-for-services model and why it might be the future of funding. Tune into a lively debate about AOC's potential presidential run. Hear fascinating insights on AI revolutionizing education and personalized learning experiences. Plus, delve into the allure of TV villains and what makes them so captivating. This discussion blends finance, politics, and pop culture for an engaging experience.
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The Two Viable VC Models
- Venture succeeds at two extremes: huge mega-funds that live on fees or tiny funds that survive on minimal staff and early bets.
- Funds between ~$100M–$1B struggle because fees don't cover costs and carry becomes diluted among more people.
How Big Rounds Reshaped VC
- From 2010–2020 institutional capital and media attention inflated round sizes and valuations across stages.
- That normalization of huge rounds made mid-size funds uneconomic and shifted later-stage capital to PE-like investors.
Personal VC Funding Experience
- Touch Ventures' Fund 1 ($35M) produced big winners while Fund 3 ($140M) created a tougher economics for the GPs.
- Bradley says the $140M fund was the "worst of all worlds" because fees didn't cover rising costs and carry for partners shrank.