O'Driscoll: Smaller VC funds offer better risk-adjusted returns than mega-funds
Rory O’Driscoll · DeepSeek Raises at $50B | The Rise of Open Source vs OpenAI & Anthropic | OpenAI Builds Own Chip · 20VC with Harry Stebbings · Jun 25, 2026 · at 54:41
Rory O'Driscoll, General Partner at Scale Venture Partners, discusses fund sizing dynamics while analyzing Menlo Ventures' strategy of staying at a conservative $3 billion fund size.
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“Provided you've got a big enough check size to play in any round as a GP, you actually, quote unquote, have higher risk adjusted return if you have smaller funds because then you have less cross deal aggregation. In other words, two separate one billion dollar funds versus a single two billion dollar funds, all other things being equal, you have more probability of winning on at least one of the One of the two funds than on the single two billion funds.”
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