The Twenty Minute VC

Kyle Harrison: Why 75% of Active Investors Will Disappear in the Next Few Years | 20VC #940

Kyle Harrison is a General Partner @ Contrary and one of my favourite writers on the venture space with his blog, Investing 101 2.0. Before joining Contrary, Kyle worked in the ranks of some of the biggest and best names in venture, starting with a spell at TCV before moving to Coatue and making his final stop at Index. Across firms, Kyle has led or participated in investments including Ramp, Pave, Anduril, Gitlab, Databricks and Snowflake to name a few. ----------------------------------------------- In Today’s Episode with Kyle Harrison: 1.) From Film Lover to Technology Investor: How Kyle went from creating a professional services marketplace around film to joining the ranks of TCV and investing in breakout technology companies? What was Kyle’s biggest takeaway from TCV? How did it impact his mindset? What was Kyle’s biggest lesson from working with the Laffont’s at Coatue? How did it change the way he thinks about price and market sizing? Why was Index such a transformational school of venture for Kyle? How did that experience change how he thinks about what it takes to be a great investor? 2.) The Death of So So Venture Firms: Why does Kyle believe many of the “so so” venture firms will die? What does Kyle believe makes a venture firm “so so”? Who is vulnerable then? How does Kyle think the lifespan and “death” of venture firms will change in the next decade? 3.) The Rise of “The Blackstone of Venture Firms”: How does Kyle define “the Blackstone of VCs”? Who are they? With increasing fund sizes will we see VC returns denigrate to PE returns? How is the world of family offices changing the venture environment? Will we see more or less money flood into venture over the coming years? Of the incumbents, who has done “The Blackstone” model well? Why? Who has failed? Why? 4.) The Rise of Community in Venture: What does “community” really mean to Kyle? Why does he believe it will play such a prominent role in the way the best invest in the future? How have existing players failed to build, sustain and productize communities? What are the best opportunities for new entrants to create and utilize communities to invest? ----------------------------------------------- Timestamps: 0:00 Kyle’s Background 2:38 Lessons Learned from TCV, Coatue, and Index 8:15 Biggest BS Advice in Venture 10:51 How Venture has Changed 13:30 The Death of the So-So Venture Firm 19:55 LP Incentive Structures 23:20 How Kyle would Structure his Family Office 25:19 Building Brand and Relationships in Venture 33:36 Y Combinator Built a Generational Community 35:06 The Rise of Blackstone of Venture Firms 43:02 What are the biggest changes you’ve seen since the correction? 47:35 Did you lose price sensitivity during the boom period? 50:23 Kyle’s Favourite Book 50:54 Most Underrated Angel Investor 51:14 How Kyle got Involved in the Roam App Community 52:01 Kyle’s Biggest Miss 52:57 Kyle’s Biggest Hit 54:13 Will the growth market be better or worse in 12 months? 56:47 What would you most like to change about the world of Venture? 57:28 Kyle’s Most Recent Publicly Announced Investment ----------------------------------------------- Subscribe to the Podcast: https://www.thetwentyminutevc.com/kyle-harrison/ Follow Harry Stebbings on Twitter: https://twitter.com/HarryStebbings Follow Kyle Harrison on Twitter: https://twitter.com/kwharrison13 Follow 20VC on Instagram: https://www.instagram.com/20vc_reels Follow 20VC on TikTok: https://www.tiktok.com/@20vc_tok ----------------------------------------------- #KyleHarrison #20VC #HarryStebbings #venturecapital #angelinvestor #business

Harry StebbingshostKyle Harrisonguest

Oct 20, 20221h 0mWatch on YouTube ↗

WHAT IT’S REALLY ABOUT

Venture Capital’s Future: Differentiation, Community, and the Death of Mediocrity

Kyle Harrison, now a GP at Contrary and formerly at TCV, Coatue, and Index, describes how his nontraditional path and firm experiences shaped a very ‘studied’ and workmanlike approach to venture capital. He argues that most venture firms are subpar and predicts that 50–75% of active investors will disappear, as founders increasingly choose differentiated partners over generic brands. Much of the conversation centers on the shifting power from firms to individual partners, the importance of community and enduring relationships, and how capital excess and valuation inflation warped behavior during the boom. Harrison also warns about “Blackstone of innovation” dynamics—mega-firms like Andreessen acting as asset-allocation machines—which may create dangerous abstraction between macro capital decisions and the micro reality of company building.

IDEAS WORTH REMEMBERING

5 ideas

Most venture firms lack clear differentiation and will struggle to survive.

Harrison believes 50–75% of active investors may disappear because they cannot articulate a distinct identity, deliver strong economic performance, or maintain healthy culture and brand in a more transparent, unforgiving market.

Power is shifting from monolithic firm brands to individual partner brands.

Founders increasingly ‘pick people, not firms,’ rewarding partners who build authentic public personas, clear ‘vibes,’ and visible value—turning investors like Logan Bartlett or Harry Stebbings into key decision drivers over the firm logo.

Community only works when it is the core product, not a sidecar.

Most VC ‘communities’ and scout programs are shallow because they are optimized for deal flow, not member experience; Contrary’s model starts with supporting high-potential people long before they are founders, aiming to remain relevant throughout their careers.

Excess capital and weak standards masked bad behavior and poor craft.

The boom years allowed bad unit economics, weak products, and sloppy processes to be papered over by money; Harrison is struck by how few investors have publicly reflected or admitted mistakes, even as the correction exposes those sins.

Valuation must be anchored in venture math and realistic growth paths.

Harrison stresses simple return math—future revenue, dilution, and public multiples—as a sanity check; he regrets how easily investors (himself included) modeled billion‑dollar revenue trajectories as base cases to justify lofty prices.

WORDS WORTH SAVING

5 quotes

Probably 80% plus of venture funds are not great. We just don't always know which ones they are.

— Kyle Harrison

Venture is meant to be studied.

— Kyle Harrison

There’s a shortage of ambition in the world, and every founder could benefit from having Amjad on their cap table.

— Kyle Harrison

Enough money can hide a multitude of sins.

— Kyle Harrison

I wish we could de-risk that earliest journey into building something. There are a lot of ambitious people trapped in systemic risk intolerance.

— Kyle Harrison

Kyle Harrison’s unconventional route into venture and lessons from TCV, Coatue, and IndexWhy most venture firms are ‘so‑so’ and why many will disappearThe shift from firm brands to individual partner brands and ‘renegades’ in ventureCommunity, deep relationships, and how Contrary structurally centers themLP incentives, mega-funds, and the “Blackstone of innovation” concernPost‑correction dynamics: valuations, growth equity, and lack of industry mea culpaDe-risking early company formation and broadening who can become founders

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