TLDR:
- LPs who fund venture firms are defaulting on their commitments.
- One firm, 3+ Ventures, is buying up distressed stakes from these LPs.
The article discusses how LPs, including pension funds and family offices, are defaulting on their commitments to venture firms. This has led to a domino effect in the market, causing venture firms to struggle to fund startups and ultimately leading to some firms becoming zombies. Sara Ledterman, managing partner of 3+ Ventures, noticed this trend and is raising $300 million to buy distressed stakes from defaulting LPs. She believes that by acquiring these stakes, she can help provide liquidity to struggling LPs and support promising startups. While some VCs are hesitant to openly discuss buying distressed stakes, Ledterman sees it as an opportunity to make strategic investments and support the ecosystem. Overall, the article highlights the challenges facing the venture capital industry as a result of LP defaults and the innovative strategies being employed to navigate these difficulties.
