Venture LPs Welcome AI Gains but Watch Fundraising Pace

Limited partners (LPs), who supply capital to venture firms, are benefiting as portfolio values rise at OpenAI and Anthropic. But the concentration of investment in those two companies and the speed at which some venture capitalists are raising new funds have prompted caution, according to two LPs interviewed by TechCrunch.

Amit Bhatti of TrueBridge said concentration is common as venture funds mature, describing it as a feature of the business. He cited Databricks, SpaceX and Stripe as large holdings in funds more than 10 years old, and said he hopes newer funds will hold substantial positions in Anthropic and OpenAI. Beezer Clarkson of LGT Capital Partners said early-stage funds still have a broader range of opportunities, with smaller investments.

The investors said fundraising and investment cycles have accelerated. Clarkson said some funds are returning to raise capital after one year, compared with a previous norm of two to two and a half years. Bhatti said 12 to 18 months is now not unusual for some fast-moving funds; he previously considered 24 to 36 months roughly normal. Some managers are also increasing fund sizes mid-cycle, which Bhatti called unusual.

Both described the pace as a concern rather than an immediate alarm. Bhatti said larger funding rounds, including seed rounds that have nearly doubled in size, can push funds to invest faster. He contrasted earlier accelerated investing in crypto companies with current companies that, he said, are growing from zero to $100 million in revenue. The interview was edited for length.