Most people misunderstand venture capital fund flows, Nicole DeTommaso notes

Most people misunderstand venture capital fund flows, Nicole DeTommaso notes
How venture fund money actually flows

Nicole DeTommaso addresses a common knowledge gap in venture capital interviews, stating that 99% of candidates struggle to explain how money truly flows through a venture fund.

She lays out the basic misconception that VCs simply raise money, invest in startups, and generate returns, before indicating that the actual mechanics are more complex.

DeTommaso has previously highlighted challenges in venture capital transparency. She reported that median founder ownership decreases from 56 percent at Seed to 11 percent after Series D funding rounds. In an earlier note, she also warned that the industry’s focus on rapid mark ups can lead to misalignment with limited partner interests.

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