VC isn’t VC anymore — understanding the rise of Cancer Capital

gist

Anil Dash argues that a handful of mega “venture” firms have stopped being venture capital: management fees on tens of billions remove portfolio risk, post-VC legal forms enable self-dealing, and political spending turns the industry into an unaccountable oligarchy he names Cancer Capital. Ordinary VCs and new founders still play by old rules on a field those firms define, while media and politicians cheer job creation that is no longer the primary goal.

ideas

• Healthy VC was meant to stay small. High-risk checks were a thin slice of capital markets; unlimited growth of that cell is the cancer metaphor for an economy that needs mostly stable assets.
• Scale detaches partners from outcome risk. At 2% of $50B, a firm earns a billion a year whether portfolio companies live or die, then exits the legal VC category and its constraints.
• Founder–investor power has flipped. Instead of VCs chasing founder companies, mega-firms publish political programs and select “founders” to execute them; the other 99% of VCs still play on that field.
• Post-VC forms enable self-dealing. Buying founder shares, holding public stock, selling a stake from one fund to another, and early cash-outs before IPO let returns precede profits.
• Outsiders still read the old story. New founders, media, and politicians treat VC as job-creating startup finance while the largest firms concentrate wealth and political power.

quotes