A look at Neo, a VC firm that made early bets on startups including Kalshi and Cursor, pushing the value of its first two funds far above industry averages
The venture firm, led by CEO Ali Partovi, illustrates the growing gulf between a few top performers and the industry medianLinkedIn:Yuliya ChernovaandHadi PartoviLinkedIn:Yuliya Chernova:The 2021 venture-fund vintage appears to be a hopeless laggard. But there are exceptions. Ali Partovi's $150 million 2021 venture fund …Hadi Partovi:I'm proud to have been among the first investors in Neo, to back my twin brother Ali Partovi's innovative approach to “people capital,” investing in founders over
Context & Ripple Effects
Neo’s current standing builds on Ali Partovi’s earlier model of pairing promising engineers with experienced technology mentors, giving the firm a differentiated sourcing and founder-development channel rather than simply a larger pool of capital.
The result also lands against a bifurcated venture backdrop: the 2021 financing boom drew substantial participation from non-VC investors, while this report identifies Neo’s 2021 fund as an exception to a weak vintage. Neo’s outcome echoes the return concentration shown in a16z’s reported history of outsized net gains.
First-order effects
- Neo gains a stronger fundraising and reputation advantage as the reported values of its first two funds distinguish it from the venture-industry median.
- Kalshi and Cursor become more visible examples of Neo’s early-selection record, potentially strengthening the firm’s appeal to prospective founders and limited partners.
Second-order effects
- Other early-stage firms face more pressure to demonstrate proprietary access to founders or repeatable portfolio-support models, rather than relying on broad market exposure.
- Limited partners evaluating underperforming 2021-era funds are likely to place greater weight on manager selection and realized or marked portfolio concentration, reinforcing capital flows toward firms with credible standout holdings.
Third-order effects
- If performance remains concentrated among a small set of managers and breakout companies, venture capital could become more polarized: elite firms retain access to the best founders and fundraising, while median firms find it harder to differentiate.
- The pattern favors venture strategies built around durable founder networks and early identification of technical talent, though fund marks will still need eventual exits to validate the separation.
The trend: This is one data point in the concentration of venture returns, where differentiated access to frontier founders and a few exceptional investments increasingly determine which managers can raise and compete.