In artificial intelligence’s funding bonanza, a tiny circle of startups can stack billion-dollar rounds in quick succession, while everyone else fights for what’s left.
Less obvious is that the same squeeze is happening to the venture capitalists themselves.
“It’s harder than ever to raise a fund as an emerging manager,” says venture capitalist Nisha Dua.
A trained lawyer and longtime builder at AOL, she’s spent the last 12 years at BBG Ventures, an early-stage firm that backs female founders and entrepreneurs from diverse backgrounds. Business Insider recently named Dua to the Seed 40 list of top women investors.
Just as funding has clustered around a small number of startup darlings, Dua said, investor capital is increasingly flowing to the biggest, best-known venture firms. Data supports the vibe. Experienced firms captured 91% of all capital raised in the first quarter of 2026, up from 74% for all of 2025, according to PitchBook. That was the highest share on record in PitchBook’s dataset.
Established managers have always had an edge with limited partners, who tend to prize brand names, long track records, and proven returns. But the latest data suggests that edge has become something more severe: a fundraising market that is practically closed to most emerging managers.
Dua has lived through it. She closed her latest fund in the middle of a fundraising winter.
During the pandemic, capital was abundant, and swarms of investors left established firms to raise funds of their own. By the end of 2022, the market had turned. Tech stocks sold off, the IPO window shut for late-stage startups, and limited partners grew more cautious about where they committed new money.
For emerging managers, the shift was brutal. Many had launched in an era of easy money and were left trying to raise in a market that had suddenly become far less forgiving.
When Dua and her cofounder, Susan Lyne, went out to raise a new fund in 2024, they sold their track record and, just as importantly, their worldview.
The firm’s thesis is that founders who understand the problem firsthand are often best positioned to build software to solve it. That leads the firm into categories including consumer, health, and small business services — areas that are now always as crowded with generalist investors chasing the same deals.
Dua had made early bets on breakout companies like Spring Health, the mental healthcare startup last valued at $3 billion, and Starface, the fast-growing skincare brand known for its pimple patch. Lyne had landed an investment in Zola, the wedding-planning startup.
The firm’s edge, Dua said, is access. BBG gets into rounds partly because of Dua and Lyne’s own operating experience. It also offers founders a network of CEOs, public company directors, founders, and other investors who can help them navigate the next stage of growth.
That pitch helped the investors lock in new and existing investors. In 2024, BBG Ventures — short for Built by Girls — closed $60 million for its fourth and largest-ever fund.
Having raised through the downturn, Dua said the bar for emerging managers is even higher now. A track record helps, but it isn’t enough on its own.
Limited partners want to know where a manager thinks the world is going, how their investments will shape that future, and what gives them differentiated access to the founders building it, Dua said.
Too many emerging mangers struggle to articulate that clearly, she said. They may have interesting networks or promising early deals, but they fail to explain the thesis behind the fund — or why they are uniquely positioned to win.
“You have to have a real point of view,” Dua said.
