Bradley Tusk, co -founder and managing partner at Tusk Venture Partners, said Techcrunch in today’s Equita episode that VC, as we know, is dead. And it has been for the last 4 years.
“Maybe there is a VC that I have never heard of that it is liquidity in the last few years, but we have not returned 1 USD of capital to our LPS for four years,” said Tusk.
VC was about a few years old thanks to higher percentage rates, startup valuation failures from 2021 and difficult IPO and M&A transactions.
Many investors suspended their breath for President Donald Trump to rejuvenate the VC landscape by deregulatory and pro-business tax reforms. However, uncertainty after Trump’s record executive orders, trading wars driven by a tariff and dismantling of federal agencies softened the expected increase in VC activities.
Or, as Tusk put it: “I just don’t know many serious economists who think that a trading war is a good idea for every economy.”
So Tusk bows from the traditional VC model and decided not to collect the fourth fund. Instead, it changes concentration to the “own capital” model, which allows Tusk to accept capital in exchange for helping startups in navigation in regulatory environments, legislative communication and government orders.
For Tusk, capital for services return to his roots. In 2010, when he just launched his political consulting company Tusk Strategies, what a small technology company called Uber turned to its services at the time. Uber had no money to pay him, so they offered him their very own capital. Tusk spent the next few years “conducting campaigns throughout the United States to legalize Uber and sharing driving.”
Creating regulatory frames for destructive technologies to save startups from death by politics has been bread and Tusk’s butter for years, which is the knowledge that he gained thanks to the earlier role as a campaign manager in the race of mayor Michael Bloomberg and deputy governor Illinois.
All “real VC things”, such as obtaining funds from LPS and “compatibility, car seats, building a portfolio”, began to feel attention from the variety of work, which he really loves to do.
And it seems to be a shortcut to perform the work he loves, and at the same time earns more money than he can do as a classic Venture investor.
“When I realized that I could easily get to the tables and get capital from startups, which I like in exchange for my knowledge, the traditional model simply did not make sense,” said Tusk.
“I actually earned more money when I was in the capital of ownership, because although there is a smaller lever than at a check of the undertaking, you keep 100% income,” he said. “During the traditional undertaking I have to return the investment capital to investors. I have to pay off the fees, and then I have to give them 80 cents per dollar,” he said.
Tusk Venture partners will proceed to support their existing portfolio firms until the fund’s life cycle ends in 2031.