Venture capital (VC) funds are getting bigger, and
their limited partners (LPs) are demanding more protections.
That has pushed VC terms closer to those of buyout funds
In the past few years investors have earned huge
returns by investing in early-stage tech companies –
some of which have become unicorns, or privately-held companies
worth more than $1 billion. And it’s
clear that there are still opportunities to disrupt traditional
services, especially given widespread mobile internet access
and increased willingness to participate in the so-called
Previously VC funds focussed on seed capital or
early-stage investments which were smaller. They had fewer
resources than private equity (PE) or buyout funds, and
therefore included fewer investor protections for LPs.
However as VC funds grow, LPs are less willing to
concede on these points.
"The trend is that larger institutions such as...