MISALIGNED INCENTIVES IN VENTURE CAPITAL

Summary from the TLDR Founders newsletter

The growing disconnect between general partners and founders is reshaping venture capital dynamics. With fund sizes expanding, many firms now prioritize management fees over profit-sharing incentives, leading to rapid capital deployment and less involvement with portfolio companies. Founders should assess if their VCs prioritize “2% or 20%” motives, focusing on whether the partnership aligns with growth or fund management.