Lightspeed Venture Partners, one of Silicon Valley’s largest venture capital firms, has changed its regulatory status to broaden its range of investments — following similar moves by Sequoia Capital, Andreessen Horowitz and General Catalyst as they shift away from the traditional VC playbook.
Lightspeed, which manages $31 billion in assets, has completed the process of becoming a registered investment advisor (RIA), according to a US Securities and Exchange Commission filing. The move is the culmination of a lengthy regulatory process and gives the firm freedom to invest more capital into assets beyond direct startup equity. It’s also a signal that most of the country’s biggest VCs now have ambitions to expand beyond only investing in startups.
A representative for the firm declined to comment.
Lightspeed is one of the last major venture firms to change its regulatory status, as VCs seek to invest in a wider array of assets, including public and secondary shares, as well as cryptocurrencies. Without the RIA designation, VC firms may only allocate up to 20% of their capital to holdings outside traditional startup equity.
Venture capitalists’ ambition to expand their range of investing isn’t new — driven by the growth in the VC industry over time, and rising competition for startups. That trend has accelerated recently, partly because of investors’ conviction that artificial intelligence will reshape a wide swathe of businesses. Many firms have embraced private equity-style roll-ups, buying or launching companies, and transforming them with AI rather than just investing in them.
The “traditional VC model does not best position founders to transform industries,” General Catalyst, also an RIA, wrote in a blog post last year. Taking a page from the PE playbook, that firm is acquiring larger stakes in startups, as well as creating AI-native startups in house. It also recently launched a wealth management division, and acquired the non-profit health system Summa Health last year — a highly unusual step for a Silicon Valley firm. General Catalyst has ceased to call itself a VC firm altogether, preferring instead the title “global investment and transformation company.”
