Young VCs, like young coders, question industry involvement

Dawn Capital partner Shamillah Bankiya warns of an “exodus” of young venture capitalists from the industry as the end of the 2022 bull run and AI’s impact reshape investment dynamics. The 34-year-old, who becomes a full equity partner this week, believes the industry may be returning to its “artisanal roots” after years of excess, with young investors increasingly questioning whether venture capital remains the fastest path to wealth.

The big picture: The venture capital industry is experiencing a significant talent drain as market conditions tighten and AI transforms traditional investment practices.

• Research by Pitchbook shows the number of active venture capital investors in Europe has dropped by 30% in the past two years.
• Bankiya notes that four peers within her own friendship group have left the industry in the last 12 months, with both men and women departing.

Why young VCs are leaving: The changing landscape has made it harder for junior investors to compete and find their place in the industry.

• Many are questioning whether venture capital is still the “least path of resistance to becoming rich,” with AI-native companies now offering more attractive opportunities.
• The commoditization of capital means deals are no longer won simply by showing up with money—experience and contacts have become crucial differentiators.
• “If you have 30 years of experience working with founders it is impossible to compete against that as a young VC,” Bankiya explained.

AI’s disruptive impact: Large language models like ChatGPT have eliminated much of the research work traditionally done by junior investors.

• Tasks like reading multiple reports, summarizing market data, and preparing founder questions can now be automated.
• “I do that by myself now. It affects the structure of funds. We are seeing that you can do more with less,” Bankiya said.
• This efficiency gain reduces opportunities for recent graduates to enter and learn the industry.

Market conditions: European venture capital funding remains constrained, with 2025 projected to have the lowest annual fundraising total in a decade.

• Second quarter 2025 European VC funding totaled $12.6 billion, maintaining similar levels to previous quarters.
• Overall venture funds are struggling to raise new capital and exit existing investments despite the AI investment boom.

What separates survivors: Bankiya identifies three key reasons people stay in venture capital long-term.

• Believing that technology will continue changing the world and that VC will remain important to that journey.
• Wanting to engage with founders daily and hear their stories.
• Maintaining curiosity and desire to learn something new every day.

The survival strategy: Young VCs must find alternatives to experience when competing for deals.

• “For me, that is actually energy and enthusiasm. When I join a company’s board I become an extension of their team,” Bankiya explained.
• She focuses on being “extremely practical” and helping founders tackle their most pressing issues.

Looking ahead: Bankiya warns that while AI makes funds more efficient, neglecting young talent investment could prove fatal.

• “If you don’t invest in young talent because it is easier to do it with AI, your fund will die,” she cautioned.
• Dawn Capital, which manages over $2.5 billion in assets and backs companies like $2.6 billion-valued Quantexa, a financial crime data and analytics firm, continues investing in younger team members.