Top New York VC Ben Lerer says more mid-sized VC firms are heading for failure

Ben Larar, managing partner of one of New York’s most prestigious seed-stage venture firms, Larar Hippo, shared some predictions With Fortune’s Leo Schwartz.

He believes venture firms will continue to see a divide as money mostly pours into top funds like Thrive and A16Z, as well as smaller more desirable funds.

“You’re floating somewhere in the middle where you’re going to die, managing a few billion dollars, and not doing anything particularly well,” he told Schwartz.

While a few billion dollars is certainly not chump change, many companies have struggled to collect from the end of the 2021 spending stream. The Financial Times Also reported earlier this month The number of active venture firms in the US has started to decline due to cash flow only to the top names This is perhaps the biggest example of a top VC firm announcing in 2024 It will shutter the foundry group.