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Bradley Tusk says he makes more money with ‘equity-for-services’ than he did asa traditional VC
Bradley Tusk, managing partner at Tusk Venture Partners, claims the traditional VC model is 'dead,' transitioning to an 'equity-for-services' model. He cites factors like high interest rates and failed IPOs for VC struggles, stating he’s more profitable now without traditional fundraising pressures. Founded on past successes with startups like Uber, Tusk prefers this model, allowing him to secure equity while offering regulatory and strategic support.
Key points
- Bradley Tusk believes traditional VC is dead due to factors like higher interest rates, low startup valuations, and fewer IPOs.
- Tusk has not returned capital to LPs in four years, indicating a struggling VC environment.
- He is shifting from traditional VC to an 'equity-for-services' model, trading expertise for equity.
- This model was historically successful for Tusk, with early collaboration from Uber.
- He finds traditional fundraising distracting and less profitable than his current model.
- Tusk Venture Partners will support existing companies until the fund ends in 2031.
Why it matters
- Tusk's announcement reflects the ongoing shift in venture capital towards alternative funding models amidst economic challenges.
- The trend mirrors broader concerns about the sustainability of traditional investment vehicles in light of changing market dynamics.
- As of 2025, startups increasingly seek non-traditional financing routes due to economic volatility post-COVID and geopolitical tensions.
Tusk's move to an equity-for-services model highlights a significant shift in venture capital practices, emphasizing the need for adaptability in a changing economic landscape where traditional models struggle.