A $99.9B fund makes 93% of VC profits — yet every rational LP picks the $100M fund
JosephJacks_ · x · 2026-09-13
Ed Suh's thought experiment: suppose the VC industry is just two funds — one at $99.9B growing to $105B in ten years, the other at $100M growing to $500M. The giant fund generates 93% of the industry's profits, yet no rational investor would rather be an LP in it, because the small fund's multiple (5x) crushes the giant's (1.05x). The point: VC returns are driven by small, high-multiple funds, and scale is the enemy of multiple.
More from Venture
- UK GDP beats forecasts at 0.4% in July, with programming and info services adding 0.12pp — krishnan · 2026-09-13
- After 13 Years, Seldo's Open Source Economics Essay Lands on "Send Corporations a Huge Bill" — seldo · 2026-09-13
- Jim Cramer: Slowing growth costs make Anthropic's S-1 numbers dazzle — geoffwolfe · 2026-09-13
- AI valuations can't all be right: memory at 3-5x PE vs premium infrastructure, says Gavin Baker — rohanpaul_ai · 2026-09-13
- Six Weeks After Blowup, Leopold Aschenbrenner's Fund Is Back Buying the Same AI Stocks — AccBalanced · 2026-09-13
- Polymarket puts 62% odds on Anthropic IPO by end of October 2026 — Polymarket · 2026-09-13