With capital chasing the best deals, and hundreds of millions of dollars pouring into some startups, most funds now scoff at the idea of Lean. Rather than the “first mover advantage” of the last bubble, today’s theory is that “massive capital infusion owns the entire market.” And Lean for startups seems like some quaint notion of a bygone era.
We are seeing the downstream effects of this new theory/approach on fundraising by venture firms. Increasingly funds are raising sidecar funds / growth funds that allow them to infuse massive amounts of capital in their best early-stage portfolio companies, to avoid being diluted by a huge investment from another expansion-stage firm. Many venture firms are evolving into full-cycle financing partners from seed to Series X. Sequoia is probably the best example of this right now with their $8 billion global fund.