The same AI boom making VCs rich might be the thing that makes them obsolete.
The Signal
Venture capital has run on the same playbook for 50 years. Ten-year funds. 2-and-20 fees. Power law returns where 95% of gains come from 5% of firms. The model works because founders need things they can't get themselves: capital, talent, infrastructure, distribution. Scarcity is the entire value proposition.
AI agents are attacking every part of that scarcity problem. Need to build a prototype? Claude or Cursor can ship MVP code in hours, not months. Need to test and iterate? AI-powered dev tools cost hundreds, not hundreds of thousands. Need technical talent? You can now get 80% of a senior engineer's output from an agent that costs $20 a month. The infrastructure VCs used to fund, cloud providers now rent by the second.
The economics are stark. Building a tech startup in 2015 required $2-5 million in seed funding just to get to product-market fit. Today, a solo founder with $50K and the right agents can reach the same milestone. When the barriers to building collapse, the barriers to funding matter less. Why give up 20% of your company for capital you don't desperately need?
The irony cuts deeper. VCs are pouring billions into AI companies, funding the very tools that make their core offering less valuable. They're financing their own disintermediation.
The Implication
Watch for new funding models that match the new build costs. Revenue-based financing, profit-sharing agreements, or just founders bootstrapping longer and raising less. The VC model won't disappear, but it'll have to justify itself in a world where the scarcity it exploited is evaporating. If you're building, question whether you actually need institutional money, or just think you do because that's how it's always been done.
Source: Fast Company Tech