(Bloomberg) — Lightspeed Venture Partners, one of Silicon Valley’s largest venture capital firms, has changed its regulatory status to broaden its range of investments — following similar moves by Sequoia Capital, Andreessen Horowitz and General Catalyst as they shift away from the traditional VC playbook.
Lightspeed, which manages $31 billion in assets, has completed the process of becoming a registered investment advisor (RIA), according to a US Securities and Exchange Commission filing. The move is the culmination of a lengthy regulatory process and gives the firm freedom to invest more capital into assets beyond direct startup equity. It’s also a signal that most of the country’s biggest VCs now have ambitions to expand beyond only investing in startups.
A representative for the firm declined to comment.
Lightspeed is one of the last major venture firms to change its regulatory status, as VCs seek to invest in a wider array of assets, including public and secondary shares, as well as cryptocurrencies. Without the RIA designation, VC firms may only allocate up to 20% of their capital to holdings outside traditional startup equity.
Venture capitalists’ ambition to expand their range of investing isn’t new — driven by the growth in the VC industry over time, and rising competition for startups. That trend has accelerated recently, partly because of investors’ conviction that artificial intelligence will reshape a wide swathe of businesses. Many firms have embraced private equity-style roll-ups, buying or launching companies, and transforming them with AI rather than just investing in them.
The “traditional VC model does not best position founders to transform industries,” General Catalyst, also an RIA, wrote in a blog post last year. Taking a page from the PE playbook, that firm is acquiring larger stakes in startups, as well as creating AI-native startups in house. It also recently launched a wealth management division, and acquired the non-profit health system Summa Health last year — a highly unusual step for a Silicon Valley firm. General Catalyst has ceased to call itself a VC firm altogether, preferring instead the title “global investment and transformation company.”
Thrive Capital is another firm adopting some private equity strategies. Earlier this week, Thrive, also an RIA, launched a new vehicle called Thrive Holdings. The investment vehicle will allow it to start and acquire companies that can benefit from AI. Thrive is raising about $1 billion for this effort, according to the New York Times. A spokesperson for the firm declined to comment.
Lightspeed, with investments that include Anthropic and Wiz, is expected to launch a new set of funds soon totaling $7 billion, Bloomberg reported. Like other venture firms, the size of Lightspeed’s investments have swelled alongside its funds. In March, Lightspeed led a $3.5 billion investment in the chatbot developer Anthropic, valuing it at about $60 billion.
Lightspeed, like many other VC firms, has also recently doubled down on secondary deals, hiring a former managing director at Goldman Sachs, Jack Fowler, to manage the firm’s secondary markets strategy. VC firms have dedicated more capital to acquiring shares in startups on the secondary market as startups have stayed private longer. Over $100 billion in assets are expected to sell on the secondary market in 2025, up from $25 billion in 2012, according to VC firm Industry Ventures.
Silicon Valley giant Andreessen Horowitz was among the first VC firms to become an RIA, in 2019. It later introduced a wealth management arm and participated in Elon Musk’s buyout of Twitter in 2022. Many have speculated that the next step for firms like Andreessen Horowitz is an initial public offering, following in the footsteps of PE giants like Blackstone and KKR. However, the largest VC firms have yet to take any official steps towards an IPO.
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