The Hollow Middle Is a Leadership Problem

Why venture’s future depends on firms willing to choose judgment over drift

A familiar story is being told about venture capital right now.

As the narrative goes, capital is concentrating. A small number of mega-funds dominate access. Everyone else is either getting pushed earlier or squeezed out. The “middle” is hollowing.

You can find versions of this argument everywhere.

And in many ways, it is true.

But it is also incomplete.

What’s happening isn’t the death of the middle.

It is the death of the generic middle.

And those are not the same thing.

We have seen this movie before

Venture capital is not the first industry to go through this shape-shift.

Investment banking went through it. The bulge brackets consolidated. The boutiques specialized. The undifferentiated middle firms struggled.

Private equity followed a similar arc. Mega-platforms scaled. Niche specialists thrived. Mid-sized firms without a clear reason to exist got caught in between.

While I was in business school in the early 2010s, I saw that management consulting went through this too. Large global firms expanded. Small specialist shops emerged. The middle firms that survived did so by becoming opinionated, sector-anchored, and execution-driven.

In each case, the surface narrative was consolidation.

But underneath it, the real filter was clarity.

Who knew exactly what work they did best?
Who had leadership willing to commit to that answer?
Who redesigned the structure around judgment rather than habit?

Those firms endured.

The rest drifted.

AI has accelerated everything, not rewritten the rules