The venture capital narrative has become increasingly contradictory.
Capital is said to be abundant, yet fundraising feels harder than ever – especially for emerging managers. Both claims are technically true, but neither explains what is actually happening beneath the surface.
On December 11, I attended a virtual Fund of Funds (FoF) and Family Office–focused event organized by Inniches that offered a far more grounded view of today’s LP environment.
The discussions revealed not a lack of capital, but a system under pressure: overloaded allocators, liquidity-constrained family offices, and an increasingly aggressive filtering process that most managers underestimate. Needless to say, that there is a growing number of emerging fund managers, too.
As I’m currently raising funds for my fund at AGC Wealth Management – I’m an emerging fund manager myself – I happen to observe the trends on both sides.
The takeaway was clear. This is not a market where just better market performance wins. It is a market where clarity, positioning, competence, and a unique way to generate alpha matter more than ever.
While the event was packed with insights, here are my takeaways that are going to shape the reality of the markets in 2026.
7. Capital exists, but LP attention is the real bottleneck
There is no shortage of funds seeking capital, and there is no shortage of managers seeking LPs. The bottleneck sits in between.
Funds of Funds and family offices are facing a significant backlog. Allocators are fielding constant inbound from managers, introductions from intermediaries, and follow-ups from prior conversations. Even high-quality funds are competing for limited attention bandwidth.
In this environment, the marginal difference between a thoughtful, well-researched approach and a generic pitch is decisive. Managers are not being rejected because they are bad; many are simply being filtered out because LPs lack the time to properly engage.
McKinsey’s research on private capital shows fundraising has been increasingly difficult: the average time to close a fund jumped to record levels in recent years as LPs take longer to commit amid macro uncertainty and a weak exit environment. Funds that closed in 2023 were on the market for longer than in previous years, underlining how slow capital deployment has become.
Attention has become the scarcest resource in the fundraising process.
6. Fundraising is harder because capital is flowing out faster than it comes in
One of the least discussed realities is that many family offices are experiencing liquidity pressure.
Losses during the COVID era, capital trapped in illiquid real estate, private equity, and venture funds, and weaker exit activity have reduced distributions materially. On paper, many family offices still appear well-capitalized. In practice, deployable capital is often limited.
The result is a widening gap between perceived wealth and actual investing capacity. This explains why conversations may feel positive, interest may be genuine, and yet commitments fail to materialize.
Understanding this dynamic is essential. A “no” today is often about balance sheets, not belief.
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5. FoFs are open to cold outreach, but only from managers who did the work
Contrary to popular belief, Funds of Funds are not closed fortresses. Several allocators openly stated they are receptive to cold inbound.
However, the bar is high.
Cold outreach only works when it demonstrates a clear understanding of:
- the FoF’s mandate and stage focus
- funds they have previously backed
- where the manager is a fit, and where they are not
Generic messages asking “Do you invest in X?” or pitching without context are immediate disqualifiers. Effective outreach is specific, respectful of time, and framed around alignment rather than entitlement.
Preparation is no longer optional, it has become the entry ticket.
4. Solo GPs are no longer novel
Solo GPs are now a recognized category. Their existence no longer raises eyebrows. What does raise scrutiny is the lack of a defensible advantage.
Allocators consistently return to the same questions:
- What is your real right to win?
- Why do you get access to opportunities others don’t?
- Which top-decile companies can you reach, and why?
Some event discussions touched upon venture capital being an outlier business. If a manager cannot credibly explain how they access the top 10% of outcomes, structure and branding become irrelevant. The tolerance for vague network claims has largely disappeared.
3. Managers should vet LPs as rigorously as LPs vet managers
A recurring theme was the importance of reverse diligence.
Smart managers spend time identifying not only who might invest, but who clearly will not. And who might be better suited to others in their network. These conversations often lead to warm introductions, which are now far more valuable than direct institutional outreach.
University endowments, in particular, were widely cited as low-probability targets for emerging managers. The timelines are long, the decision-making opaque, and the opportunity cost significant.
As some capital allocators summed up: spend more time vetting, and less time spamming.
2. The industry is quietly moving away from scale-for-scale’s-sake
There is growing fatigue around mega-fund narratives and the “bigger is better” mentality, sometimes described as the Blackstonification of venture capital.
Some institutional allocators are actively reconsidering large, homogeneous vehicles in favor of smaller, more focused managers with a clear return construction logic. The question being asked is no longer “How big can this fund become?” but “How does this fund generate exceptional outcomes?”
Managers who can articulate the math behind their returns – rather than relying on ambition alone – are increasingly advantaged.
1. Networks now matter more than events
Perhaps the most counterintuitive insight was how little traditional networking events matter to serious allocators.
A significant portion of single-family office deals now originate from direct relationships and platforms like LinkedIn, not from conferences. Many family offices do not attend public events at all, preferring private invitations and trusted referrals.
Visibility, credibility, and thoughtful outbound engagement have overtaken physical presence as the primary drivers of access.
To sum up
Three conclusions stand out.
First, fundraising difficulty today is structural, not personal. Liquidity constraints, attention overload, and slower capital rotation define the current environment more than manager quality alone.
Second, the LP bar has moved upstream. Funds of Funds and family offices are open to emerging managers, but only those who demonstrate preparation, differentiation, and a credible right to win.
Third, spend more time selecting investors that will invest in your fund. It doesn’t matter if you start a hedge fund, a VC or a private equity firm, you should segment the investors you want to work with.
For managers, the implication is clear: fewer meetings, better targeting, and sharper positioning. In a world where attention is scarce and liquidity is constrained, clarity has become the most valuable asset of all.
What trends do you see? Which side of the funding game are you on? Share your thoughts in the comments below.
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