Venture firms, unlike companies, exhibit something like an inverse square relationship b/t size & alignment due to the power law. When the bulk of returns are generated by a small number of companies it's exceptionally hard to believe everyone at the firm deserved to get paid.
This erodes trust, turning partners against one another, thereby eroding economies of scale and networks. I hypothesize that venture firms' power accrual is therefore nonlinear wit scale (of people, not dollars).
There are rare exceptions where power law psychology and epistemic humility are so central to the firm's culture, beaten into the younger partners as they rise up, that they fend off this phenomenon longer.
@Jimmy_S_Yun
Yes to micro-socialism, but socialism doesn't scale. (See: early Christian church and other communes, Dunbar's Law.) I am a micro-socialist, macro-capitalist (as we all should be).
@IanRountree
They don’t and aren’t but that’s OK. Outside of firms like Benchmark staying small by choice, those who succeed keep pool of GPs small and attract younger employees to drive returns and grow fund sizes. There’s no career path all the way up. But if the brand is strong enough and…
@IanRountree
Provocative, but important.
Amid high performance firm-wide, a “mindset of abundance” supports egalitarianism, insofar as camaraderie persists.
If/when the going gets tougher and a “mindset of scarcity” emerges, attribution tends to set the cultural tone.