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Jason Preston's avatar

This is great analysis. I’ve been thinking of “purist VC” as “Wildcatting”, in a nod to the practice in oil exploration. But I think we should welcome the idea of a more explicit division within VC of the different strategies, risk profiles, and practices already in the market. This can only help LPs allocate for the exposure they want and in turn should help the entire industry in being aligned.

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Joe Milam's avatar

I would suggest the industry needs a 'third way'. The 'Purist VC' model can't accommodate the scope, geographic dispersion, diverse business models and entrepreneurs. It's ineffective for most startups and LPs given the dispersion of returns, as well as the structural limitations and inefficiencies for startups seeking capital. For those GPs with actual skill, sure. Stay focused and disciplined. But as a viable funding structure given the dilution of GP skills, ('fast following' is a poor investment thesis), there needs to be innovation at the earliest (Seed to B) funding rounds. There is a way, the research confirms this. See https://bit.ly/3UoRYDF & https://bit.ly/43FhNUA

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