The limited partners that supply capital to venture firms—the “money behind the money”—are feeling increasingly confident. They are navigating unfamiliar territory, but it also appears to offer exceptionally strong returns. Traditionally, LPs diversify by spreading commitments across multiple managers, writing checks to both emerging and established firms, and to generalist investors as well as specialists. The aim is strong performance while reducing risk—an approach that has long guided the industry.
That playbook is largely being upended. The valuations of OpenAI and Anthropic have risen at such speed that many LPs have concentrated their bets on these two companies, often investing through the same venture firms. This concentration runs counter to a longstanding venture norm of avoiding deals that create conflicts with one another. Yet, for the moment, there is little visible backlash. LPs interviewed by hinews appear comfortable with the elevated risk, betting on substantial gains. Still, they acknowledge potential dangers, describing the current environment as a “yellow light” situation, and expressing unease about how quickly venture capitalists are returning to raise fresh funds.
hinews spoke recently with Beezer Clarkson of LGT Capital Partners, a Zurich-based diversified asset manager, and Amit Bhatti of TrueBridge, a Chapel Hill firm focused exclusively on venture. The conversation has been edited for length. “These are strange days—exciting but also scary,” Clarkson said. “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 viewed as a niche, and now that AI has become all-consuming, virtually all the attention is on venture. This feels like our moment rather than, “Oh gosh, what’s going to happen?” The pace of investing and the valuations may differ, but significant developments are unfolding, and the focus is intensely on this segment of private capital. Your funds increasingly hold the same flagship names—OpenAI and Anthropic—replicated across the various funds you back, and your responsibility is to maintain institutional diversification. How do you think about that? It’s obviously positive right now, but if things turn, it could be less so.
Amit Bhatti: Venture has always been a power law business, so I actually see the concentration as a favorable sign. If we were reaching maturity in one of our funds and still had numerous small positions, it would suggest something had gone wrong. Our funds that are more than 10 years old are increasingly consolidating into a handful of names. You see a lot of Databricks, a lot of SpaceX, and a lot of Stripe. In this generation of funds, I would expect to see a lot of Anthropic and a lot of OpenAI. That’s a feature, not a bug. Not every company will work out, but this kind of consolidation is typical. The difference now is how quickly it has occurred. I do not consider it an immediate panic signal.
Beezer Clarkson: At the early stage, you still encounter a wide variety of opportunity sets, and the dollar amounts are smaller. While everything aggregates toward the same companies, early-stage funds are not participating in the largest late-stage transactions, which means there is typically more diversity there—if that is the goal. Funds that previously followed four-year cycles have compressed timelines to three years, then two, and in some cases to 18 months. Is that pacing acceptable, or is it a concern?
Beezer Clarkson: We are seeing funds come back on one-year pacing, which is fast. The norm was probably two to two and a half years. Some funds are deploying more quickly because they are taking concentrated, large-check positions. That could be a worrying sign. It might play out well, but it is generally harder to get it right with a one-year vintage.
Amit Bhatti: We are seeing something similar. I would have said that 24 to 36 months was broadly normal. Now, 12 to 18 months is not unusual for some of the funds moving extremely quickly. Many funds are increasing their fund sizes mid-cycle, which is unusual. One reason is that rounds have become much larger. If Anthropic is raising a substantial quantum of capital and you allocate 20% of your fund to it, you are obviously ahead of pace. Seed round sizes have also nearly doubled, so if you want to lead, you are writing a check that is twice as large. Overall, it is definitely a yellow light, and it gives us some discomfort. However, when we examine what these managers actually purchased, the picture looks different from the headline pacing. The last time we saw accelerated pacing, investors were heavily involved in zero-revenue crypto moonshots. Today, we are seeing more companies move from zero to $100 million in revenue—something that would have been unheard of before. If you have an excellent manager who returns every year, but the returns remain largely theoretical, can you simply tell them, “Call me next time,” or do you risk losing your seat at the table?
Beezer Clarkson: Leaving a manager and then returning later is very difficult. It happens, but more commonly LPs downsize their commitment. In 2021, many LPs said, “If I was going to give you $10 million, I’ll do $5 million, because $10 million was for two years.” In our own portfolios, pacing trends are transmitted through, so we think not only about our pacing, but also about yours.
Amit Bhatti: We are doing the same. We are building out a calendar that outlines when we expect to make commitments, so if a manager strays far from that plan, we have to ensure the capital is available. You do see people either reduce commitments or communicate changes in advance. It is hard to claim you are sitting it out entirely, because then you are not reliable capital. That is also part of why you are seeing upsizes: managers do not want to return and explain that they are raising an entirely new fund, so they increase the existing one.
Beezer Clarkson: Another factor is that some investors rotate out of venture because capital calls continue while distributions do not yet arrive, and they still must meet their operating obligations—whether those obligations come from an endowment, a hospital, or a foundation. That dynamic creates strain. LPs generally value time diversification, yet many venture funds were raised in recent years, including those backed startups at elevated valuations during the pandemic. How are those funds performing, and how would you characterize 2026 so far?
Beezer Clarkson: The 2021 vintages are still early, at roughly five years in, and they argue against making one-year funds. Some investors may capture a portion of an AI success story and look excellent, but the odds of getting it right within a single year are simply lower, especially given how extreme the valuations were.
Amit Bhatti: If I look over the last 15 years of our portfolio, I would not assume the COVID vintage is the strongest one. Still, a few breakouts emerged. OpenAI existed during that period, and Cursor started far back as well, so both appear in some of those funds. Liquidity has also begun to flow. The past two years were definitely slower, but SpaceX is the headline, Cerebras generated a major exit this year, and there have been several other IPOs and a substantial amount of M&A activity. We are seeing $10 billion-plus M&A exits, including a $60 billion deal [with Cursor]. Liquidity is moving beyond IPOs. How are your venture fund managers thinking about secondaries? If I were a VC, I would have been tempted to take money off the table in OpenAI or Anthropic.
Beezer Clarkson: Secondaries have become far more sophisticated in venture over roughly the past five years. The activity is concentrated among a handful of top companies, but it is much more common than it used to be, and I think that is positive because the ecosystem needs liquidity options. Venture depends on that. If you wait 20 years for an IPO, that is not the structural outcome many of us envisioned. Deals are also happening at multiple levels now. LPs sell stakes in their GP interests, or sell a strip of their portfolio, and the stigma around such transactions has eased.
Amit Bhatti: This is now the third pillar of liquidity: IPOs, M&A, and secondaries. Private equity has long had a well-developed secondaries market, while venture did not. It was almost a taboo term—you sold only when you were under distress. Then, in 2021, many people felt they had missed their chance: “I should have sold.” Now more managers view secondaries as a legitimate tool, and they are using it more judiciously. If you still believe the power law thesis, you likely are not trying to exit the entire position. But if you can sell 20% of your stake and return your fund, you should probably do it. There is a lot of founder selling and employee tender activity—often very early into a company
