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Bradley Tusk , co - father and managing pardner at Tusk Venture Partners , told TechCrunch intoday ’s installment of Equitythat VC as we know it is dead . And it has been for the last four age .
“ Maybe there ’s some VC that I ’ve never heard of that ’s awash with liquidity the last couple of years , but we have n’t deliver $ 1 in capital letter to our LPs in four year , ” Tusk said .
VC has had a approximate match of years thanks to higher interest rates , crashed startup valuations from 2021 heights , and stymied IPO and M&A transaction .
Many investors had been obligate their breath for President Donald Trump to rejuvenate the VC landscape with deregulatory measure and pro - business taxation reforms . However , the doubt watch over Trump ’s record - break executive orders , duty - fueledtrade wars , and thedismantling of federal agencieshas temper the anticipated surge in VC activity .
Or as Tusk put it , “ I just do n’t recognize many serious economists that think a trade war is a good idea for anyone ’s economy . ”
So Tusk is bowing out of the traditional VC modelling and has decided not to prove a quaternary fund . Instead , he is shifting focus to an “ equity - for - services ” model , which allows Tusk to take equity in exchange for helping startup navigate regulative surroundings , legislative communications , and regime procurement .
For Tusk , fairness - for - table service go back to his roots . In 2010 , when he had just launch his political consulting house Tusk Strategies , what was then a small transport technology companionship called Uber enlist his services . Uber did n’t have the cash to bear him , so they offered him fairness . Tusk spent the next few years “ running campaigns all over the U.S. to legalize Uber and drive - communion . ”
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Creating regulative fabric for tumultuous technologies to save inauguration from death by political relation has been Tusk ’s bread and butter for twelvemonth , an expertise he earned through previous theatrical role as cause manager for Michael Bloomberg ’s 2009 mayoral race and deputy governor of Illinois .
All the “ real VC stuff , ” like fundraise from LPs and “ conformation , board seats , portfolio grammatical construction , ” just initiate to find like a distraction from the kind of oeuvre he actually loves doing .
And it feels like a crosscut to do the body of work he loves , while still actually throw more money than he can make as a classic venture investor .
“ When I realized that I could just as easy get on hood tabular array and get equity from startups that I wish in tax return for my expertness , the traditional mannikin just did n’t make a fortune of sense , ” Tusk say .
“ I actually made more money when I was in equity - for - services because even though there ’s less leverage than there is on a speculation check , you keep 100 % of the proceeds , ” he said . “ Whereas in traditional venture , I ’ve get to devolve the investiture capital to investor . I ’ve got to retort the fees , then I ’ve get to give them 80 cent on the dollar , ” he said .
Tusk Venture Partners will carry on to support its existing portfolio companies until the fund ’s life hertz ends in 2031 .
