A reckoning is coming for emerging venture funds, and that, VCs say, is a good thing

New venture capital funds are facing a challenging landscape as they compete for a smaller percentage of limited partner capital. Emerging fund managers must get creative in their fundraising efforts, with some having to cut fund targets and work with larger firms. The process of raising capital for a fund is more complex than for a startup, and emerging managers often face a long and challenging process. However, there is a positive trend of more geographically dispersed and diverse fund managers raising larger funds. Success for emerging managers lies in specialization, playing to their strengths, and building relationships with larger firms. While there may be a shake-out among emerging funds, those with staying power will grow stronger.