Why Do We Chase the Top of the Food Chain?

Natural human impulse: get to the top of the food chain.

Likewise, a koi fish that climbs the very top of the waterfall becomes a dragon.

Similarly, a pawn who comes to the last line on the chessboard becomes the queen.

Being a VC is often seen as the final stage in the Silicon Valley career food chain.

Newcomers dream of becoming founders; founders dream of an exit. Those who exit, in turn, aspire to become influential angels or fund leaders, shaping the market and securing a place in Silicon Valley history.

In fact, I lost count of how many times friends told me, as top secret, of course, that they’d like to one day exit their company and become a professional investor. They are like future parents with the “Let me show you how to do it right!” attitude.

But, is it as cool a career after all?

Indeed, at some point I noticed that most VCs whom I personally know have started or joined VC funds in the past 2-3 years. Is that because the VC space grows so quickly? I don’t think so.

In fact, many VC funds are quietly dissolved. Yes, a status of a “former investor” exists – despite no one talking about it out loud. According to U.S.

Bureau of Labor Statistics data, about half of all new businesses fail within five years, and funds are no exception. According to Forbes, thousands of private-equity and venture funds have quietly stopped making new investments in recent years — so-called “zombie funds” — with roughly 1,200 funds meeting that definition and total zombie-fund assets reaching $1.16 trillion by the end of 2025.

No wonder:

1. Is This Career Really Purely Performance-Based? 

Investment funds are judged by ROI alone. Regardless of good intentions, LPs will take their capital elsewhere if returns don’t stand out.

According to Harris, Jenkinson, and Kaplan (2014), venture funds as a group actually underperformed public equities in the 2000s. According to a landmark study published in The Journal of Finance (Kaplan & Schoar), capital flows strongly toward funds with a track record of strong performance and away from underperformers, confirming that LP loyalty follows returns, not relationships.

2. It’s a Marketplace Like Any Other. 

Both investors and founders operate under constant scarcity and competition, as truly no-brainer opportunities are rare. When they do emerge, top investors are already competing for them long before most ever see the deck. As a VC, you’re always competing for reputation and early access, trying to secure a seat at the right table at the right time.

According to Gompers et al. (2020), VCs rank the founding team above product or market when picking deals.

3. What Happens Once People Know Your Status?

You can’t even have a normal conversation in a social setting that doesn’t become a pitch at some point.

Not only that, many of the VCs I know need special insurance in their private lives, as everyone seems to hunt for their cash. Even driving into a pedestrian with a bike could result in a lawsuit and millions in compensation.

Inconvenient truth? As an investor, you are a hunted prey 24/7.

This gives me a flavor of the times back in the days when I first discovered that an “academic professor” – a role that every PhD student aspires to – is not as cool a job as I originally believed. In fact, it gives much worse conditions and requires much more physical and mental stamina.

I could only compare that feeling to learning that Santa Claus does not exist.

Conclusion.

In the end, this realization has come. Happiness is not waiting for me there, at the end of the food chain — any food chain, for that matter. Happiness is here.

People approaching me because of the knowledge I have.

That feels so much better than people approaching me because of the money in my pocket. I’m not sure I ever want to change that. Happiness is, literally, here and now.