I’ve noticed something in the last several months. You’ve probably notice it, too.

GPs at huge, established funds are leaving en masse.

• Bilal Zuberi left Lux Capital
• Sriram Krishnan, Kristina Shen, and Michelle Volz left a16z
• Matt Miller left Sequoia
• Ethan Kurzweil left Bessemer
• Mike Volpi left Index
• Alison Lange Engel left Greycroft
• Terri Burns left GV
• Sandhya Venkatachalam left Khosla

The list goes on. And while some of these folks joined different funds, or are focusing on Board positions, or are semi-retired, others are leaving for a different reason: to start a fund of their own.

This isn't just a career pivot — it's an industry shift.

What's driving these investors away from their cushy positions? What do they hope to create? And what hurdles will they encounter?

We'll discuss all that and more in today’s edition of Small Bets.

Ready? Let’s dive in.

Why the exodus?

Let’s talk a little bit about how these behemoth VC funds actually operate.

Pretty much all VC funds use management fees to operate the business of running the fund. So if a VC raises $1m, they’ll typically allocate 2% ( or $20k) of that for management fees.

Well, imagine you’re Andreessen Horowitz and you raised a $7.2B round. Beep boop boop let’s do the math – yep, that’s $144m.

But here’s the thing: Even if the fund’s portfolio companies don’t achieve big exits, those fees keep rolling in.

Meaning the incentive to push for stellar portfolio performance is less, well, incentivizing.

When you’re managing huge sums like this, it’s not uncommon for the partners to play it safe rather than swing for the fences. Less of a culture around finding unicorns, more of a culture around maintaining the status quo.

Then there’s the bureaucracy. The red tape. The layers of approval that make the firm move about as quickly as a tortoise on a lazy Sunday afternoon.

You really can’t blame an adventurous GP from wanting to break free (cue Queen).

Plus, they might see themselves as uniquely well suited to win LP dollars for their own fund. After all, they’ve got:

• strong connections to other investors (potential LPs)
• name recognition to attract founders
• a portfolio of their own (presumably), which they could leverage to warehouse deals
• savings (again, presumably) to foot the back-office-ops bills coming their way

The question is… will they succeed in going up against their former employers (and all the other funds out there) to win deals and LP allocation?

What they’re up against

It doesn’t matter how rich or successful you are. Emerging fund managers are facing big challenges right now.

Fundraising is tough (looking at you, economy). Many LPs are choosing to back the legacy funds rather than gamble on a newcomer.

Figuring out how to differentiate your fund, position your story, provide proof of concept, build deal flow channels from scratch… all while competing with funds big and small? Cue lots of pitch deck revisions and late nights.

Then comes the juggling. You’re hunting for unicorns, building your brand, managing operations, handling investor relations, navigating fund admin work, interviewing tax accountants and lawyers, filing paperwork, and trying to get press.

Oh, and maybe you have a family? Or a partner? Or a life? It’s a full plate.

It's enough to make any GP wonder if stepping out solo was the right call.

But if their bet pays off, the rewards could be massive. Sure, there’s money to be made.

But there’s also the freedom to move as quickly as you want, the ability to be agile and creative in finding those elusive outliers, the pride from building something out of nothing, and the honor to serve founders who are shaping the world.

Not all sunshine and rainbows

Look. Starting a fund is hard. But there’s something that can make it a whole lot more fun: friends.

See, much like starting a company, starting a fund is lonely work. It’s long nights and emails that go unanswered and endless meetings and to-do lists that only get longer.

Just like we tell our solo founders, community can ease the burden in a big way.

Once you start connecting with other GPs who are on a similar journey, opportunities start to appear.

You meet more potential LPs. You share feedback on your pitch decks. You get invited to co-invest on a great deal. You collaborate on a new podcast concept.

And guess what’s the best place for investors to make friends? No question: Camp Hustle.

Camp Hustle is where investors meet. Whether you’re an angel, VC, family office, or fund-of-funds, Camp Hustle is the pinnacle of investor events.

Sure, there’s learning opportunities around supercharging your deal flow, attracting LPs, building a brand (not to mention a pitch clinic for VCs), etc etc.

But there are also 250 kind, inclusive, creative, bold people industry folks. And everyone is there for one thing – to build connections.

No egos, no pretentiousness, no a**holes. Just genuinely great humans who want to back genuinely great founders.

Wanna join us?

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