Many of the great VC firms and solo GPs started out with funds of $10M or less. These micro VC firms have a risk appetite which is crucial to the industry, and play an important role in seeding risk capital where larger firms cannot. "Micro VCs play a pivotal role in democratizing access to entrepreneurial finance by allowing ventures to get funding from a new type of investors. Moreover, micro VCs encourage more kinds of limited partners to access the VC industry." - Micro VC (2022) Unfortunately, the associated regulatory costs make operating at this scale incredibly difficult in the UK. Admin and compliance often consumes about $1.4M of a $10M UK fund, versus just $450k in the US. As a result of this high cost, the median fund size in the US was $20M in 2024, in the UK (with just 3% of the volume) it was $88M. So, the UK not only has lower total venture capital volume, it also has fewer small funds — the worst of both worlds. This is a major bottleneck, but there is a fix. If you're interested in hearing more, drop me a DM. (Credit to @cupazhou and @samhuleatt for the graphic below, from The Side Letter.) Micro VC paper: https://t.co/eTjNJhppV7