| Over 300 organizations rely on The Information for exclusive insights into public and private companies, including in-depth analysis of the ways in which tech moves markets. Click here to contact our corporate and enterprise team to learn more. Welcome back! After tech stocks crashed three years ago, the correction in private startup valuations led to a wave of partners leaving their venture firms. Over the past year, a new exodus has emerged as investors depart with plans to set up their own funds. Six early-stage partners from Andreessen Horowitz, Coatue Management, Founders Fund, Lightspeed Venture Partners and Forerunner Ventures have left their firms in the past few months or are in the process of doing so. More are in the works, I hear. Underpinning these departures is a shift among the biggest venture capital firms. In part as a reaction to the dearth of public offerings—which has deprived VC firms of the chance to cash out of their investments—they're expanding beyond traditional VC to other investment strategies. That includes private equity roll-ups, buying public stocks and snapping up other investors' startup shares at a discount. Some investors who have built their careers on finding and fostering founders are chafing at these changes, which can lead to fights for capital and other resources within these more sprawling VC firms. Some want to return to more specialized investing by going out on their own. Satish Talluri, an Andreessen Horowitz partner who works with general partner Martin Casado on artificial intelligence infrastructure—startups that develop everything from foundational models to software tools—is in the process of leaving the firm after nearly seven years. Talluri is fundraising for his own venture fund, where he will be a solo general partner and invest in young AI startups, according to two people with direct knowledge of the fundraising. At Andreessen, he invested in AI infrastructure company Pinecone, among other developer and enterprise tooling companies. Andy Chen, a former general partner at Coatue Management, left the New York–based firm after more than seven years to start his own firm, aimed at incubating early-stage startups, according to two people with knowledge of the matter. Called Outcast Ventures, according to a filing, the firm aims to recruit and pair founding teams and lead investments into startups, according to one of the people. At Coatue, Chen invested in companies from seed stage to early growth, including Scale AI and Figma, according to his LinkedIn. Another former Coatue general partner, Abhijoy Mitra, in April announced a $210 million fund for a new venture firm focused on backing deep tech startups, such as those in energy and manufacturing. Mitra co-founded the firm last year with two other partners. And Jennifer Campbell, a former partner at Founders Fund and a co-founder of crypto brokerage company Tagomi, left the Peter Thiel-run venture firm at the end of last year to start her own firm alongside other investors. The team has received $100 million in commitments and is targeting raising $300 million in total for their debut fund, according to two people with knowledge of the fundraising. The San Francisco–based firm is focused on early-stage startups across all sectors and has already invested $35 million into companies. Two partners focused on consumer startups have also gone solo. Mercedes Bent, a partner at Lightspeed Ventures, stepped back from her role at the firm in the beginning of this year and is in the process of starting her own consumer-focused venture firm, according to a person with direct knowledge of the matter. Brian O'Malley, a former partner at Forerunner Ventures, left the firm early this year and is in the process of raising a fund, targeting $100 million. The Wall Street Journal earlier reported on his departure. Some partners are opting to stay at the firm but shifting to the venture partner role, which requires less time and energy. For example, Annie Kadavy, a former managing director at Redpoint Ventures, stepped back from her role earlier this year and will be a venture partner at the firm. Kadavy will keep her board seats at various companies but make fewer investments, according to a person with knowledge of the move. Sarah Tavel, a general partner at Benchmark, announced on X in April that she was also moving to a venture partner position, similarly keeping board seats and committing to making some new investments. Several of the fund managers who are leaving bigger firms will be competing on early-stage deals with their alma-maters and other companies that have more firepower to go after these deals. And they're also contending for a shrinking pool of capital. Last year, first-time fund managers raised $5.7 billion across 121 funds, down around 50% in dollars and number of deals from the year prior, according to PitchBook. This year is also off to a sluggish start. As of the first quarter of this year, first-time fund managers have raised $700 million across 15 new funds, around half of what they raised in the same period a year ago. The limited partners I talk to say they're interested in backing newcomers because smaller funds tend to outperform larger ones. Of course, the LPs expect managers to show more than just blue-chip credentials—they must have won successful deals. Even with macroeconomic challenges and pickier investors, I expect to see more departures. One underrated reason: It may be more immediately lucrative to start a venture firm and pocket the management fees than hold out for a share of profits from a venture fund whose 2020-2022 investments have soured returns. For some, the grass may be greener at a solo fund. | 
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