VC/Tech boomed through the 2010s and COVID, but there's been a sharp decline in the past 5 years, exacerbated by AI. VCs have effectively disrupted themselves.
VC funding largely went to two buckets that no longer require that level of capital:
• Product development: where historically one had to spend $$$$ to hire big development teams (50-100 engineers), AI has supplanted this need, collapsed building costs, and accelerated development timelines.
• Marketing: Throwing $0.40 of every VC-funded dollar at ads/PPC to grow organically is less efficient than acquiring existing assets (distribution, existing customer databases), which is the domain of PE.
Where growth equity historically took proven & rapidly-growing ventures into profitability, the new version acquires customers and cheaply reverse engineers and/or acquires the products/services that they want.
Anecdotally, I see more former tech/VC people entering the deal-by-deal PE space. Lower risk, more diversified, more precision, more about relations (vs. product).
