VCs admit returns are competed away, yet pre-seed capital stays scarce
AccBalanced · x · 2026-11-07
nedoleary highlights a contradiction: nearly all his VC friends agree venture investing is too crowded and returns are being competed away, while founders say the only reliable funding for risky early ideas comes from hobbyist angel investors and accelerators like YC — which repeatedly earn returns vastly greater than venture firms. Yet most non-founders are genuinely surprised that pre-seed capital is scarce, and few attribute the gap to big funds' management-fee incentives.
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