Bradley Tusk, co-founder and managing partner of Tusk Venture Partners, told TechCrunch in Today’s Fair Drama The VC we know is dead. Over the past four years.
“Maybe some venture capital has never heard of this in the last few years, but we haven’t returned $1 in capital to our LPS in four years,” Tasker said.
VCs have had a tough few years thanks to higher interest rates, 2021 highs kickoff valuations, and Chabied IPO and M&A trading.
Many investors have been breathing President Donald Trump, restoring risk landscapes through relaxed measures and pro-business tax reforms. But the uncertainty after Trump’s record-breaking execution order, tariff trade war, Demolition of federal agencies The expected surge in VC activity has been alleviated.
Or as Tusk put it, “I just don’t know that many serious economists think that a trade war is a good idea for anyone’s economy.”
Therefore, Tusk succumbed to the traditional VC model and decided not to raise the fourth fund. Instead, he shifted his focus to the “Equity Services” model, which enables Tusk to accept equity in exchange for helping start-ups navigate in the regulatory environment, legislative communication and government procurement.
For Tusk, the service based on equity can be traced back to his roots. When he just started his political consulting firm Tusk Strategies in 2010, a small transportation technology company at the time said Uber served him. Uber had no cash to pay him, so they offered him stock. Tusk “runs campaigns across the United States to legalize Uber and ride-sharing.”
Creating regulatory frameworks for disruptive technologies to save startups from politics has always been Tusk’s bread and butter, the expertise he gained from formerly as Michael Bloomberg’s 2009 Mayoral Competition and Illinois’s lieutenant governor campaign manager.
All the “real VC stuff” like LPS’s fundraising campaigns and “compliance, board seats, portfolio structure” are just beginning to get distracted by the work he really likes.
And, doing the job he loves feels like a shortcut, and is actually still more money than he earns as a classic venture investor.
“The traditional model doesn’t make much sense when I realize I can easily get the hat table and get fair from startups that I like in exchange for expertise,” Tusk said.
“In fact, when I’m in the service of equity, I make more money because even if the leverage ratio is less than the risk check, you still keep 100% of the gains,” he said. “Although in a traditional joint venture, I have to return the investment capital to the investors. I have to pay back the fees, and then I have to give them 80 cents in dollars.”
Tusk Venture Partners will continue to support its existing portfolio companies until the fund’s life cycle ends in 2031.
