Charles River Ventures general partner George Zachary (Steve Jennings/Getty Images)

A venture firm just gave investors their money back instead of investing in a shoddy market

Facing poor market conditions, one venture fund is choosing to downsize.

10/3/24 2:59PM

Earlier this week, I discussed how Lightspeed Venture Partners, a venture capital firm with $25 billion in AUM, appears to be expanding into private equity-like investments with its latest fundraise. Why is Lightspeed diversifying away from traditional venture investing to later stage, PE-like strategies? Because $7 billion in new capital will yield a lot of management fees, but it’s really hard to effectively invest $7 billion in venture capital. Lightspeed’s solution? Allocate a large portion of that capital to mature investments.

Another solution to the market size problem, however, is to raise a smaller fund to more effectively invest in smaller startups, or, in the case of venture firm CRV, return some of the capital that you just raised back to investors. From The New York Times:

The firm (CRV) will tell its investors this week that it will return the $275 million that it has not yet invested from its $500 million Select fund, which is designed to back more mature start-ups.
The reason, four of the firm’s partners said in a joint interview, is that market conditions have changed for the worse. The valuations for start-ups are too high relative to their potential for a payoff, the partners said.

Global venture capital funding reached all-time highs in 2021, with ~$694 billion (an increase of more than 100% from the year prior) being deployed across the venture market that year, but that rapid inflow of capital pushed valuations really, really high as more and more money chased a limited number of deals. Combine climbing valuations with a dismal IPO market, and you have an environment filled with richly-valued companies and investors that can’t offload their stakes.

Given current market conditions, I think we’ll increasingly see venture funds fall into one of these two buckets: AUM conglomerates that diversify into other asset classes to make more management fees, and smaller, tactical venture funds that can still effectively navigate the startup market and find good value.

Funds that get stuck in the middle around the ~$1 billion range are in a tough spot: it’s difficult to deploy that much capital at reasonable valuations, especially in early-stage companies, and the management fees on a billion-dollar fund still aren’t spectacular, especially if you have a large team.

Max Knoblauch21h

The Trump administration is reportedly planning a 50% made-in-America requirement for USMCA tariff relief

Qualifying for USMCA-related lower tariffs may soon require more US-made vehicle components, according to reporting by The Wall Street Journal.

The Trump administration is reportedly planning to introduce a 50% US content requirement for vehicles covered by the trade pact to receive lower tariffs. The content would be measured by cost, according to the WSJ.

There currently isn’t any US-specific requirement for those lower tariff rates, but in order to receive preferential tariffs, vehicles are must contain at least 75% regional content (components made in North America). Per Reuters reporting, the Trump admin is seeking to raise the regional requirement to 82%.

These reported plans are subject to change as the US negotiates USMCA terms with Mexico over the next few months.

Overall, Tesla will likely have the easiest time qualifying for any stricter requirements. The automaker’s vehicles contained the highest amount of US/Canadian content in 2025, according to American University research. Ford, GM, and Stellantis all scored lower.

Notably: the underlying government data that many domestic content measurements rely on intentionally combines US and Canadian components, so it’s difficult to know exactly how much of any given vehicle is specifically US-made.

Exclusive | Trump Administration Wants Autos Under USMCA to Be at Least 50% Made in America

These reported plans are subject to change as the US negotiates USMCA terms with Mexico over the next few months.

Tom Jones5/29/26

The $640,000 Luce makes the average Ferrari look like a bargain

Put aside the shape; put aside the smoothing out of Ferrari’s iconic sharp edges; put aside, even, the calls from former Chairman and President Luca Cordero di Montezemolo to “take the Prancing Horse off.” On the grounds of price alone, Luce detractors might have a point.

By now, many of us will have read the criticisms of Ferrari’s first fully electric vehicle, as the Luce — which was unveiled to the world earlier this week and promptly saw the company’s shares crash out in New York and Milan — gets subtly shaded by competitors online and not-so-subtly shaded by basically everyone else.

What makes all of this worse for Ferrari is that, even by the luxury car maker’s notoriously high standards, they’ve slapped a pretty hefty price tag on the Luce, and the company’s CEO, Benedetto Vigna, has already been forced to defend the €550,000 ($640,000) price point, saying yesterday that it’s “fair to pay for innovation,” per Reuters.

While Ferrari’s cars have been getting more expensive of late, as recently as 2022, Ferrari’s average revenue per car sold was around $340,000. At nearly twice that price, this new electric model is obviously proving a little much (visually, conceptually, and financially) for many loyal and long-standing fans of the Prancing Horse to stomach.