Focus isn’t a risk, it’s a strategy

A recent industry report tracking hundreds of VC funds over the past few years shows a clear pattern: the top-performing funds aren’t the ones that placed the most bets, they’re the ones that made fewer, better ones.

They’re not built to chase what’s hot, they’re built to act with conviction.

Concentration is not about taking bigger risks, it's about being more precise

There’s a misconception that concentrated funds are riskier by nature, that focusing on fewer companies is like putting all your eggs in one basket. But what sets the best funds apart is that their focus comes with process, structure, and clarity.

They know what they're looking for. They know when to walk away. And when they find the right team, they don’t hesitate.

Concentration means discipline. It’s choosing long-term vision over short-term trends. It’s knowing that saying no is just as important as saying yes.

In a world where noise is abundant and trends change every six months, these funds aren’t chasing the train, they’re designing the tracks.‍

Small funds, big advantages

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Another quiet shift is reshaping the market. Smaller funds are becoming more common, and they’re not just leaner. They’re closer to the ground, closer to the problems that matter, closer to the founders building the solutions.

And now, the data is catching up.

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According to Carta, 42% of all VC funds launched in 2024 manage under $10 million. That’s a sharp rise in micro and small funds, fueled by a new generation of operators, repeat founders, and domain experts who are building vehicles around conviction, not consensus.

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This is not just a reshaping of capital deployment. It’s a recalibration of how value is created. Leaner funds with tighter theses and deeper founder relationships are not just faster, they’re outperforming.

Being small doesn't mean thinking small. It means staying sharp, staying close, and staying original.

Focus beats access

Across the same market conditions, the difference in fund performance is striking. What separates the top from the middle isn’t access to better deals, it’s how each fund is structured to act when a great one appears.

The best funds know when to go deep. They don’t follow market noise, they design their thesis and stay true to it.

They partner early, back technically ambitious teams, and stay in long enough for real value to emerge.

At Draper Cygnus, we’ve built for that kind of conviction

Designing for concentration is part of our DNA. It doesn’t mean we ignore new ideas, it means we know what we’re looking for, and when we find it, we commit.

We believe venture capital isn’t about volume, it’s about vision. It’s about the ability to act clearly, early, and consistently when it matters most.

That’s why we focus on fewer bets, on real relationships, on founders solving hard problems with global ambition.

Because the funds that outperform aren’t just reacting to the world, they’re helping shape it.

In Latin America, where venture structures are still evolving, we believe small and focused vehicles will play a key role as early-stage filters, surfacing non-obvious bets and helping build the next generation of deep tech outliers.

As we wait for the Q2 report, one big question remains: will this momentum toward smaller, more focused funds continue to accelerate? Or are we seeing a temporary correction before the market swings back? Either way, the next quarter will say a lot about where venture is truly heading.

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