John Rikhtegar of RBCx has been dissecting the venture ecosystem with surgeon-level precision lately.
Two of his recent analyses — on GP-LP alignment and VC-backed IPOs — pull back the curtain on where real returns (and misalignments) hide.
Takeaways:
▪️ The Alignment Mirage
→ “Even if you have perfect alignment, it doesn’t guarantee success.”
Small funds look better aligned — lower fees, higher carry exposure — but alignment alone doesn’t produce outperformance. Only 1 in 20 funds (top 5%) actually hit the mythical 3x net. For most LPs, that’s a sobering recalibration.
▪️ Fee Math vs. Fund Math
→ A $50M fund with 2% fees earns $10M in guaranteed income over 10 years.
A $500M fund? $100M.
The large fund could underperform and still make partners rich. That’s the structural irony John highlights — wealth certainty grows as performance risk shrinks.
▪️ The Power Law Follows You
→ “The same power law that defines venture private markets continues after IPO.”
John analyzed 414 North American VC-backed IPOs from 2010–2022.
Result: the top decile averaged +400% after three years.
The bottom 70% traded below IPO price — median return: -57%.
The few still carry the many, even in the public markets.
▪️ Cycles, Not Curves
→ “Venture liquidity is less a sine curve, more a sawtooth wave.”
Half of all exit value in the last decade came from just two years — 2020 and 2021.
Venture isn’t about timing perfection; it’s about vintage discipline — staying in the game long enough for the next liquidity spike.
John’s worldview is empirical, not romantic.
Alignment matters — but selection and structure matter more.
The real alpha sits where incentives, discipline, and data intersect.
Important links:
John's LinkedIn post on Small Fund and Alignment: http://bit.ly/47agoFX
John's LinkedIn post on Power Law post IPO: http://bit.ly/475pAvc
John's LinkedIn profile:
RBCx Ventures: https://www.rbcx.com/
Topics that we discussed:
