// TECHCRUNCH — INTELLIGENZA ARTIFICIALE
Pile-ins, payouts, and pacing pressure: the investors behind the VCs open up
The limited partners who provide the capital to venture firms — the “money behind the money” — are feeling great right now. They’re in uncharted territory in many ways, but also potentially exceedingly lucrative territory.
Normally, LPs typically spread their bets across many firms to diversify their own portfolios. They write checks to emerging managers and established ones, to generalist firms and specialists. The goal is a strong return, but also to minimize risk.
That’s the typical playbook. But typical is out the window. OpenAI and Anthropic’s valuations have shot up so quickly that nearly everyone has piled into the same two companies on the way up, often inside the same venture firm, despite the longstanding venture convention of avoiding investments that conflict with one another. No one is complaining, either. The LPs I speak with seem unbothered by this big gamble, given the potential returns; they’re expecting a bonanza.
But they do see danger ahead, even if they describe this as a “yellow light” situation, and they’re uneasy about how quickly VCs are coming back to raise new funds.
I talked about all of it recently with Beezer Clarkson of LGT Capital Partners, a Zurich-based diversified asset manager, and Amit Bhatti of TrueBridge, a Chapel Hill firm that focuses solely on venture. This conversation has been edited for length.
These are strange days — exciting but also scary. How are you feeling about your roles right now, and your place in this startup ecosystem?
Beezer Clarkson: It’s very busy, but I wouldn’t say it’s scary. There’s a lot of change and a lot of variables at play. I love venture, so I find the chaos fun. I’ve been doing this for a couple of decades, so seeing the cycles makes it less scary. You appreciate that these things happen, and that we should enjoy the upside, because sometimes there’s downside, and the up is a lot more fun than the down.
Amit Bhatti: If anything, it’s exciting. Venture is sometimes looked at as a niche, and now that AI is all-consuming, all the attention is on venture. This feels like our moment more than it is like, “Oh gosh, what’s going to happen?” The pace of investing and the valuations may be different, but really meaningful stuff is happening, and all the attention is focused on this corner of private equity.
Your funds all hold the same brands now, OpenAI and Anthropic, multiplied across however many funds you back, and your job is to keep your institutions diversified. How do you think about that? Obviously it’s great right now, but if things turned, it would be less great.
Amit Bhatti: Venture has always been a power law business, so I actually view the concentration as a good thing. If we were getting to the maturity of one of our funds and there were still lots of tiny positions, something’s gone wrong. Our funds that are 10-plus years old are starting to consolidate into a few names. There’s a lot of Databricks, a lot of SpaceX, a lot of Stripe. In this generation of funds, I would hope there’s a lot of Anthropic and a lot of OpenAI. That’s a feature, not a bug. Not every one of these companies is going to work out, but that consolidation is typical. What’s different is how quickly it’s happened. I don’t view it as an immediate panic signal.