Ben Lerer, leading partner of the esteemed seed-stage venture firm Lerer Hippeau in New York, recently disclosed his projected outlook to Fortune’s Leo Schwartz.
He anticipates an extension in the bifurcation of venture firms as capital majorly streams into top-rated funds such as Thrive and a16z, and also into smaller, more niche-oriented funds.
“Being in the middle, managing billions but lacking specialisation, is a sure path to failure,” Lerer informed Schwartz.
While managing billions is far from a trivial task, several firms have had difficulties in raising funds since the culminating spending spree of 2021. It was also indicated earlier this month by Financial Times that the count of actively operating venture firms in the U.S. is diminishing as funding is predominantly directed to the leading firms. A stark representation of this trend was the announcement by the renowned VC firm, Foundry Group, about its forthcoming closure in 2024.
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