A 50-Year-Old Venture Capital Model Reinvented

New Ventures Update

Date: November 03, 2021

The traditional venture capital fund formation model has remained largely unaltered since the 1970s. Typically, venture funds have 10-year life cycles which force limited partnerships to exit startup companies in that timeframe and return proceeds to investors. However, while startup company investments used to fit within that model, they are now taking far longer to mature and reach maximum return potential for investors. As such, Sequoia Capital, one of the most well-respected venture firms in the world, has decided to tie its funding model more closely to the new longer lifecycle of the startups in an effort to capture more of the late-stage profits generated outside the previous 10-year fund window.

Lindsay Karas Stencel, a partner in the New Ventures group and co-chair of the Fund Formation practice group, was recently interviewed by PitchBook Data to discuss the new model and its impacts on startups.

The full story can be found here.