Kyle Harrison: Venture Capital is Becoming McDonaldized

Kyle Harrison, a general partner at the venture capital firm Contrary, stated in a post on October 31 that venture capital is undergoing a McDonaldization process, resulting in unintended outcomes due to the overlay of efficiency, calculability, predictability, and control. He pointed out that the industry has fragmented into different forms that share the same name, characterized by scale and consensus. Harrison, who previously worked at Index Ventures, Coatue, and TCV, and founded the research platform Contrary Research, published the article in his column on the same day. Citing PitchBook data, Harrison noted that a16z has raised $23.8 billion in the first three quarters of 2026, accounting for over 20% of U.S. venture capital fundraising during the same period. U.S. venture capital funds collectively raised $108.5 billion, approximately 39% higher than the total for 2025. The number of first-time funds decreased from 479 in 2022 to 195 in 2025, with 81 so far this year; funds in their fourth round and beyond captured 88.2% of all fundraising, the highest share on record according to PitchBook. He also mentioned that the proportion of U.S. venture capital funding attributed to artificial intelligence rose from 39% in 2023 to 51% in 2024 and 65% in 2025, reaching 82.7% so far in 2026. In the first quarter of this year, five companies—OpenAI, Anthropic, xAI, Waymo, and Databricks—accounted for 73.2% of U.S. deal value. Since 2023, non-AI venture capital in the U.S. has roughly maintained an annual range of $100 billion to $120 billion. Harrison stated that once fund size dominates decision-making, every deal must align with the fund's scale.

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