In a bold departure from the industry norm, a group of forward-thinking investors is advocating for smaller, more focused venture capital funds. This movement, led by figures such as Nick Chirls of Notation Capital, challenges the prevailing notion that bigger funds necessarily yield better results.
Nick Chirls, who has a decade of experience in venture capital, recently decided to step away from his firm, which successfully raised three funds and backed over a hundred companies. Chirls and his colleagues have expressed concerns about the industry’s shift towards managing vast amounts of money, which they believe compromises the quality of investment relationships.
This emerging group of investors, including the founders of Asylum Ventures, is championing a return to smaller fund sizes. They argue that smaller funds can be more agile and provide better support to startups, fostering a healthier ecosystem for innovation. Asylum Ventures, for example, has established a $55 million fund targeted at nurturing nascent tech companies.
The push for smaller funds represents a critical examination of the venture capital industry’s trajectory, suggesting that a personalized approach might be more sustainable and impactful in the long run.
