In my latest BILANZ column, I wrote about a question that is becoming impossible to ignore: does the traditional venture capital model still work?

VC depends on a simple promise: investors lock up capital for a decade or more, accept high risk and illiquidity, and receive outsized returns in exchange. But in today’s market, many funds are struggling to deliver those returns.

Fundraising has slowed sharply, exits remain limited, and IPO markets are still selective. For Limited Partners, the key question is becoming harder to ignore: why commit capital for ten years if the actual cash returned does not compensate for the risk?

That is why DPI — distributed capital back to investors — is becoming more important than paper valuations or theoretical IRR. In a market with fewer exits, investors want proof, not promises.

This shift will reshape the industry. Large platform funds with strong brands and proven access will continue to raise capital. Small specialist funds with a clear edge can also survive. But the middle of the market will come under pressure: funds that spread capital thinly, take small minority stakes and wait for the next round may struggle.

The VC of the future will need to be more active. Simply investing is not enough. Successful funds will have to help companies build value through strategy, governance, hiring, fundraising, commercial execution and operational support.

For founders, this also changes the equation. Capital matters, but the wrong investor can become a long-term problem. The best partner is not always the biggest name or the highest valuation. It is the investor who can genuinely help the company grow.

Venture capital is not dead. But it is becoming more selective, more demanding and more honest. The best funds will continue to raise money. Many others will disappear, merge or quietly become managers of old portfolios.

For the industry, that is uncomfortable. For investors, it is overdue.