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Venture capital has a habit of relying on outdated practices and data. I’m seeing a lot of commentary on what fund sizes are most effective on Twitter, but the truth is that the fund strategies of individual firms are so nuanced that when you zoom too far out on the data, it loses a lot of signal.

When I was starting off in venture, a more senior investor told me that ‘you need to be one of the first 5 investors a founder calls to have a shot at winning that deal…if you’re not a top 5 investor for at least some portion of founders, you’ll likely not make it in this business’. This really stuck with me. I was at a VC firm in Chicago trying to build my career and left myself asking “how could I possibly be a top 5 investor for some hot SaaS company in the valley?” The reality is that I couldn’t and that realization laid the foundation for what is now Equal Ventures - an ardent focus on prepared mind investing in areas that I/we feel we can be a top 5 investor.

Last week, Josh Wolfe wrote about some of the trends he’s seeing around the venture industry and how that might play out in the years/decades to come. Amongst those was a prediction that 30-50% of venture firms may cease to exist. When you combine this data with the fact that 17% of venture funds make it to fund 4 and 44% of VC capital raised this year went to just 2 firms, my belief is that the consolidation and extinction of firms could unfortunately be far greater.

Traditionally, energy companies were just in the business of powering homes. They had a set of customers in their region with a relatively defined need for power. Their job was simply to build enough generation to meet customer demand and to deliver it to their customers. Their generation power was largely controllable (firing up power plants), making the process of mapping supply and demand relatively straightforward.

Since the founding of Equal, we have focused on the application of technology within our industries to transform their respective value chains (or as we say “To bridge the digital divide”). As we put this into practice over the last 5 years, in many cases it has meant that we’re not investing in traditional software, but rather the deployment of that software within the industry. This is a theme we started to recognize almost 8 years ago as we saw the challenges many SaaS companies ran into in legacy markets.