The End of Megafunds

Megafunds may be a relic of another era in venture capital. That’s not a bad thing. 

Insight Partners has reduced the target of its next fund 25% to $15 billion, the Financial Times first reported this week. Other firms, like Tiger Global Management and TCV, aren’t on track to meet their initial ambitious targets either.

There aren’t enough opportunities to justify more pandemic-era monster funds anyway, and many limited partners have realized those funds must land massive exits—a rarity in the industry right now—to generate satisfactory returns. Plus, the frigid fundraising environment makes raising such funds next to impossible.