Transformations in the Venture Capital Ecosystem Post COVID-Response

The third chapter describes the fundamental building blocks of the venture capital ecosystem, which is inherently complex. In spite of its complexity, the existence of the venture capital ecosystem relies on a delicate balance between different stakeholders in the system. If this delicate balance is upset, longer term and more profound changes in the industry are likely to emerge, which have also been visible prior to COVID-response and have beset the industry for some time. The chapter also outlines how COVID-response has redefined personal relations. Since venture capital is a people-centric business, restrictions have affected virtually every aspect of fund managers’ interaction with entrepreneurs and limited partners. The chapter also extrapolates what venture capital may look like in the future and describes that the venture capital industry would evolve through a number of stages, which include global consolidation of GPs partners (i.e., growing emergence of mega-funds), global pooling of LPs (i.e., emergence of global LPs), and the development of more futuristic structures based on the complete digitization of the investment process and the wide-ranging disintermediation of GPs.