I've been spending more time with founders building things in consumer and hospitality. Not software. Actual things — restaurants, brands, experiences built around people and place. The Austin community around these categories is next level and I've loved exploring this new ecosystem.
Many of these founders love what they are building. But they are not sure they love their funding options.
At first I thought it was the usual founder anxiety. Investors pushing too hard, board dynamics getting messy. But the more I listened, the more I recognized something specific. They weren't worried about their investors as people. They were worried about the structure their investors were trapped in.
That's a different problem. And it's one I'd spent a decade thinking about from the other side of the table.
I've spent most of my career as an investor, building and managing a fund-of-funds strategy across private markets. That meant evaluating hundreds of funds — meeting GPs, underwriting their portfolios, deciding whether to write a check.
When it came to venture capital, I frequently found myself in a dilemma. I admired the ambition and innovation many managers pursued. I was less enthusiastic about the incentives baked into the structure.
The venture capital complex was designed around providing institutional investors exposure to the "power law" via 10-year closed end funds. The structure has real alignment between the manager and investor — GPs get paid when there is a liquidity event. For a long time, that alignment held. Software companies were growing at triple-digit rates, there were clear acquisition targets, and IPO windows opened on schedule. The fund clock and the company lifecycle roughly rhymed.
Then they stopped rhyming.
The median company went public at 6 years old in 1980. In 2024, it was 13. Despite this shift, the fund clock hasn't moved. So you have a structure designed for a world where companies matured in a decade, applied to companies that take two. That misalignment was always there. Most people just accepted it as a given.
Now something is shifting. And most people are misreading it.
The conversation about "permanent capital" and "evergreen funds" has gotten loud over the last year. Blackstone, Hamilton Lane, KKR — everyone has launched products with liquidity windows and lower minimums, pitched as innovation. Robinhood launched a venture fund. And most recently, USVC, a fund by AngelList, made headlines with a $500 minimum, Naval Ravikant as chairman, OpenAI, Anthropic, and xAI in the portfolio.
All of these products are pitched with the same core value proposition — democratization to strategies and returns that previously have been gatekept from the masses.
That's not what I'm talking about.
What those products are solving is an access problem. They're building infrastructure to let more people buy a ticket to private markets. That's fine. It's probably net good.But optional liquidity for the investor doesn't change what happens inside the portfolio. If investors can redeem, the fund eventually needs to generate liquidity to fund those redemptions. That pressure flows downstream. The founder still feels the clock. You've just widened the on-ramp to the same highway.
The real shift that has my attention is much more subtle. The distinction is this: access infrastructure changes who can buy the ticket. Incentive architecture changes what the ticket is for.
This idea isn't new. Brent Beshore was building Permanent Equity around 30-year holding periods when the category had no name. It never fit neatly into a standard portfolio construction, there was no box for it, and so it was an easy pass despite agreeing with the thesis. The broader narrative around investing in private companies seems to finally be catching up.
The clearest recent expression is Craig Shapiro at Collaborative Fund. He recently announced Collab Holdings — a private equity strategy built explicitly around consumer brands with no fund timeline, no forced exits, success measured by cash flow and customer devotion. Shapiro described the moment that crystallized it: visiting a founder in Northern California who makes one product, has made it the same way for decades, has fanatical customers and a healthy profitable business — who told him over dinner that her investors needed to sell. She didn’t. And there was no one in the middle.
That's the problem. And it's worth being specific about what it actually is.
The traditional model was built on the premise that aligning the GP with the LP was the most important relationship to get right. GPs get paid at exit, LPs get paid at exit, so everyone pushes toward exit. What that structure doesn't account for is the founder and what happens to the company when exit pressure starts working against what made it valuable in the first place. Shapiro's insight is that GP-founder alignment can actually produce the outcome everyone claims to want. For Collab Holdings that means shared time horizons, no clock, success measured the same way. Better companies and better returns. The LP benefits, but downstream of getting the foundational relationship right.
This isn't a crisis response. Collaborative Fund has a strong track record. Shapiro isn't building Collab Holdings from weakness. He's building it from decades of watching great consumer businesses get mishandled by structures that were never designed for them, and now having the credibility and conviction to offer something different.
More will follow. The managers best positioned to build these structures aren't distressed actors pivoting out of necessity. They're established names with LP trust, track records, and the standing to ask investors to think differently about what success looks like. That's a very different conversation than a first-time manager pitching permanent capital as a concept. LPs follow people before they follow structures.
Why now?
The timing has a tailwind that didn't exist even five years ago. AI is changing the capital intensity equation for a real category of businesses.
The VC model was built for companies that need sequential capital injections to survive. Each round is partly about growth and partly about staying alive. The fund's network and signaling power matters because you need the next check.
That dependency is breaking down. Not universally — deep tech, biotech, hardware still needs the sequential capital model and probably always will. But for a certain subset of businesses like consumer and hospitality companies with strong unit economics and niche software with focused user bases, AI is compressing the path to profitability. Higher margins, lower headcount requirements, faster feedback loops. Founders who would have needed three rounds to reach sustainability might only need one.
That changes the choice set. If you don't need the next check to survive, you have real optionality about what kind of capital you take. Permanent capital becomes a genuine option rather than a theoretical one and now the structure and economic reality are finally converging.
There's another piece that isn't talked about enough, and it addresses the question I kept hearing from allocators: when do I get my money back?
The traditional model requires liquidity to come from inside the portfolio. Each company has to find its own exit — IPO, acquisition, secondary. The holding company model offers something different. The liquidity event can happen at the vehicle level.
Andrew Wilkinson built this with Tiny. You build a holding company, take it public, and suddenly investors can get liquidity by trading the stock. The underlying businesses never have to be forced through an exit they're not ready for. Collab frames it as "what would LVMH look like if you started it today." Nobody is asking LVMH when it's going to exit Louis Vuitton. That's the point.
The liquidity event, if and when it comes, can happen at the holding company level without forcing anything upon the underlying companies. It doesn't require investors to give up on liquidity. It just moves where liquidity comes from.
It’s worth clarifying that this is not true for every company. The VC model exists for good reasons. There are entire categories of innovation — the kind that requires burning capital for a decade before it works — where permanent capital would slow things down. Sequoia is not going away.
But there has been a missing piece for a long time. Excellent businesses that compound slowly and reliably — consumer brands with loyal customers, hospitality built around craft and place — have been forced into the fund clock dynamic because it was the only structure available.
What Collaborative Fund is building is a direct response to that misalignment. The team saw what the structure was never meant to do and so they built something different. That shift in thinking, from LP-first to founder-first as the path to better LP outcomes, is the most structurally significant thing to happen in private markets in a long time. And this is just the beginning.
-Alec