FoFs: The Quiet Power Shift in VC Congress just opened the floodgates for billions in new VC capital • Yesterday, two bills cleared House committee (50-2 vote) that will exempt FoFs from SEC registration and massively expand LP & AUM limits • If they're passed into law, Fund of Funds (FoFs) will control who gets access to it H.R. 4429 (DEAL Act of 2025) H.R. 4431 (ICAN Act of 2025) 1️⃣ What are Fund of Funds (FoFs)? • VC FoFs pool capital to invest in other venture funds (not startups). Although they may offer limited direct access deals they prioritize access to VC funds and emerging managers. Think of them as a VC portfolio of funds (as opposed to a VC's portfolio of startups, which VC funds manage). 2️⃣ Who are the Key Players? How to Classify? Four Types: 🎯 Specialist FoFs 💼 Institutional FoFs 🎓 University & Foundation Endowments 🏛️ Pensions & Sovereign Wealth Funds Examples: 🎯 Allocator One (@mstroeck), Foundry (@LDEakman), GEM, @HummingbirdVC / Nomads (@jordsnel), @levelvc (@jbkupperman), @maincharacterHQ (Andrea Lo), @PatternVentures (@johnfelix123), @PlexoCapital (@lo_toney), @RecastCapital (@SaraZulkosky, @courtneyrmccrea), @screendoorvc (@Lady10x) 💼 @CendanaCapital (@MKRocks)*, @FairviewCapital (JoAnn Price), GCM Grosvenor, New Catalyst SP (Jason Howard; Alice Wang) 🎓 Columbia, DUMAC, @MITIMCo, PRINCO (@Princeton), @RockefellerFdn, @Vanderbilt, @Yale 🏛️ @CalPERS, @CalSTRS, @MassPRIM, @MichiganORS, state retirement systems *More of a specialist FoF IMO 3️⃣ Why FoFs? FoFs deliver consistently high median returns vs. direct VC (credit @johnfelix123) ✅ Median TVPI for FoFs (2005–2019) beat direct VC in 12/15 years; bottom quartile 15/15 years ✅ 2011 vintage FoFs top quartile 4.14x TVPI—ahead of direct VC at 3.33x ✅ Professional fund selection & due diligence ✅ Emerging LPs access top performing VCs 4️⃣ What are the Tradeoffs ⚠️ 1% fees + 10% carry + underlying VC fees (2/20) ⚠️ Potential for diluted returns ⚠️ Less transparency into portcos 5️⃣ Why this Matters Now With only 148 first-time VC funds raised in 2024 (-68% from 2022's 466 funds), and established managers capturing ~80% of all LP dollars, FoFs have become the lifeline for emerging managers. In today's liquidity-constrained environment, they offer LPs a smarter way to deploy capital while maintaining diversification. With emerging managers struggling to raise Fund I/II/III, FoFs are the bridges and gatekeepers of institutional capital. Yesterday's vote could cement their role as the ultimate kingmakers in venture's new era. Credit:

50-2 committee votes on these two bills today. Assuming Congress keeps putting in the work here, this would represent the biggest change to venture capital fund law since the U.S. regulatory framework was passed 85 years ago. But, a lot of work left to do here.

If these 2 bills pass Congress 👀 • 250 to 2,000 LPs in qualifying VC funds • $12M to $150M limit for VC funds • FoF & Secondaries=Qualifying Investments! Gov't tracker shows 1% prognosis but DC insiders say strong bipartisan support in today's committee h/t @OfficialBBrooks

New AML compliance programs are toast

Excited to announce Cambrian’s $25mm Fund II!  I’ve been a Solo-GP for 3+ years, have backed 30+ fintech companies (80% as the first check at the pre-seed) and am having more fun (+learning more) than ever before. Fintech is only 1% built. But the remaining 99% is getting built faster than ever b/c we have - more capable founders - better fintech infrastructure And AI makes it faster and cheaper to build multi-product companies from day 1. In Fintech's first decade, we saw single point solutions generate 10s of billions of enterprise value . Now with better talent, better infrastructure and AI there's no reason startups can't generate 100s of billions of enterprise value and fundamentally change how financial services operates. I define fintech broadly.  Everything from - Payments - Insurtech - Vertical SaaS - Proptech - Capital markets - BankTech - Commerce - WealthTech - Consumer - Lending - RegTech - Fintech x Healthcare & more If you’re building in fintech, get in touch! I lead, co-lead or participate in Pre-Seed & Seed rounds w/ up to $1mm checks. And a big thanks to all the founders who’ve made this journey so rewarding and to all the LPs who have made it possible.

How should we look at Google's $2.4B non-acquisition, non-exclusive licensing agreement w\ Windsurf? First, the M&A shenanigans (AIquihires) are clearly a new type of deal to combat FTC-style inquisitions—otherwise why go through that? Second, unvested common always gets hosed.

@POTUS signed OBBBA on July 4th. Here's what it means for VCs and LPs 👇

Amazing that early-stage lead check sizes are basically the same with slightly higher % from 2021 to 2025. How can that be, @PeterJ_Walker?

A VC fund's initial closing process.

BSA policy speech: - 2x more community banks - Efficient regulations - Fair & objective - Rules consistently applied - Cost/benefit analysis req'd - Focus on risk profiles, not letter-of-the-law If even half of this happens, it'd be a 5x improvement.