3 trends that will shape the venture capital industry in the next decade

Alex Witt, partner at Verda Ventures and co-founder of SWFT Blockchain, shares his top three predictions for venture capital over the next decade based on 14 years of experience in finance and technology.

1. Growing interest in new fund managers will yield the highest returns in the coming years

Investors increasingly recognize that the success of a first fund does not guarantee the success of a second or third. As a result, there is growing interest in new fund managers who have launched fewer than three funds. Large funds often show low performance: only 17% of those with assets under management exceeding $750 million generate more than a 2.5x return. Meanwhile, smaller funds typically demonstrate higher profitability.

2. Venture capital will have a unique opportunity to support five revolutionary technologies
We stand on the brink of a new "industrial renaissance," driven by breakthroughs in five key technologies with enormous potential for venture capital. Among them:

— generative AI
— robotics
— autonomous electric vehicles
— blockchain
— biotechnology.

3. Africa and the Global South will become the center of venture-backed innovation

Demographic factors play a key role in shaping venture capital trends. Investors are increasingly directing funds to countries in the Global South, particularly Africa, due to the rapid growth of its consumer market.

While countries with shrinking populations and low birth rates, such as South Korea, face a shrinking workforce and declining interest in risk and technology. Regions with high birth rates, such as Africa, have a young, growing population and immense potential for market expansion.

The article was translated from businessInsider.com.