AI Summary
5 min readVenture capitalists Michael Eisenberg of Aleph VC, Mike Granov of Maniv, and Larry Covert of Oxcard Ventures discuss surging concentration in VC fundraising—five U.S. firms captured 73.1% of LP commitments in Q1—alongside implications for founders, returns, AI economics, defense tech, and global supply chains.
VC Concentration and the Craft Business Risk
The panel describes an accelerating shift toward "consensus capital," where mega-funds dominate, echoing cycles of bundling and unbundling in industries. In Q1, the top five firms took 73.1% of U.S. LP money, up from 12 firms at 75% in 2025; the next 10 got 15.4%, leaving 11.5% for all others. Michael Eisenberg warns this could signal the end of VC's 50-60 year run as a craft business reliant on asymmetric bets on exceptional founders and innovations. Mechanism: Large upfront capital engorges startups, inflating valuations, eroding ownership (Aleph holds double the stake of mega-fund peers), and creating losses too big for winners to offset. Public markets expose this—many IPOs drop 50-80% post-listing due to dilution. Caveat: Not all funds succeed; most underperform the index, with only top-quartile delivering worthwhile returns.
Continue reading the full summary in the app — free to try.
Read Full Summary →Free • No credit card required
What you'll learn
- 1 (00:00) **VC Concentration Stats** - Five US firms capture 73.1% of Q1 LP commits, up from 12 firms at 75% in 2022
- 2 (03:39) **Impact on Founders and Mid-Size Funds** - Guests debate if concentration harms innovation or follows industry cycles
- 3 (05:54) **Era of Consensus Capital** - Michael Eisenberg warns of VC's potential end as craft business
- 4 (08:38) **VC Math Breakdown** - Asymmetric upside fails with over-capitalization and dilution
- 5 (11:14) **Consensus VC vs Traditional VC** - Larry Covington splits into CVC-like consensus vs frontier bets
- 6 (14:25) **High-Touch Value Prop** - Mid-funds win via WhatsApp access, networks, partner-only models
- 7 (17:08) **Fund Size as Strategy** - Cap funds at $500M; larger becomes pre-IPO or consensus plays
+ Full timestamped outline available in the app
Show Notes
This Week In Startups is made possible by:
Grasshopper Bank - https://grasshopper.bank/twist
PaperOS - https://paperos.com/twist
LinkedIn Jobs - https://linkedIn.com/twistPlaud - https://Plaud.ai/twist
The top 5 U.S. venture firms captured 73% of all LP commits in Q1, and three veteran VCs say the math may have officially broken. Aleph's Michael Eisenberg argues we may be witnessing the end of a 60-year run for venture capital as a craft business. Maniv's Mike Granoff and Oxcart's Larry Covert push back, arguing it's merely splitting into two asset classes: "Consensus VC" and traditional VC. Either way, the implications for founders, LPs, and the next decade of innovation are enormous.
TWiST is back on the beat with a venture round table discussing investment concentration, the IPO drought, "bullshit ARR" in the AI era, AI gross margins, the U.S.-China chip war, the Iran conflict's impact on defense tech, the death of NATO and the rise of allied supply chains, why Tel Aviv's stock exchange could become the next NASDAQ, and a lightning round on each VC's favorite portfolio company. Let’s go!
Timestamps:
0:00 Intro + sponsor reads (Grasshopper Bank, PaperOS, LinkedIn Jobs)
0:58 Plaud: If your work depends on conversations — interviews, meetings, calls — you need a Plaud NotePin. You can check it out at https://Plaud.ai/twist and use code TWIST for 10% off!
2:13 Introductions: Eisenberg (Aleph), Granoff (Maniv), Covert (Oxcart)
3:57 The impact of rising venture capital concentration
6:43 "We may be witnessing the end of venture capital"
9:17 Consensus VC vs. Traditional VC
10:01 LinkedIn Jobs - Hire right, the first time. Post your first job and get $100 off towards your job post at https://LinkedIn.com/twist
11:48 Why mid-size firms beat the behemoths on founder access
19:35 Coining "Consensus Colossal Collaborative Capital" (CCCC)
20:03 AngelList's USVC retail VC fund — does it help mid-size funds?
20:18 PaperOS - Whether you're raising a round, launching a fund, or managing a venture portfolio, PaperOS can unlock simplicity and scale across your empire of capital, contracts, and companies. Claim your $10,000 credit at https://paperos.com/twist
23:27 Are there more breakout startups today than 5 years ago?
28:36 The "bullshit ARR" problem and AI gross margins
30:03 Grasshopper Bank - Time is money. Don't waste either. Go to https://grasshopper.bank/twist and get an exclusive $500 cash bonus just for opening an account.
32:08 Cursor's negative gross margins and the hyperscaler funding flywheel
33:06 Are we all electron constrained?
35:35 Are we headed f
More from this podcast
This Week in Startups →