Because VCs can't easily sell, they're forced to focus on a company's fundamental value growth over 5-10 years, ignoring short-term price swings. Public market investors can adopt this mindset to gain an edge over the market's obsession with quarterly performance.

Kurma Partners' recent fundraise highlights a key challenge: while specialist and corporate investors eagerly back early-stage biotech, generalist institutional LPs are shifting away. These generalists now demand shorter hold times and favor funds investing in clinical-stage companies closer to an exit, creating a potential funding squeeze for preclinical innovation.

The biggest venture outcomes often take 8-10 years or more to mature. Instead of optimizing for quick IRR, early-stage VCs should embrace long holding periods. This "duration" is a feature that allows for massive value creation and aligns with building truly transformative companies, prioritizing multiples over short-term gains.

The fund backs underfunded, high-risk ideas that others pass on. The goal isn't just to find a unicorn; it's to contribute to science by definitively disproving a hypothesis. A failure is viewed as "crossing out a wrong answer" for the entire field.

Unlike serial venture capital financing tied to milestones, Blackstone's model commits the total capital required for a drug's entire development through approval. This removes financing risk from market volatility, which is particularly advantageous for capital-intensive, long-timeline fields like neuroscience.

The dominant biotech VC model incentivizes startups to act like real estate developers: build an asset to a certain stage (e.g., early clinical data) and then sell it to a large pharmaceutical company. This focus on short-term exits discourages the long-term, ambitious company-building required for revolutionary platforms.

Drug development can take a decade, a timeframe that misaligns with typical investor horizons and employee careers. Success requires navigating fluctuating capital market cycles and implementing strategies to retain key scientific talent for the long haul.

Despite perceptions of quick wealth, venture capital is a long-term game. Investors can face periods of 10 years or more without receiving any cash distributions (carry) from their funds. This illiquidity and delayed gratification stand in stark contrast to the more immediate payouts seen in public markets or big tech compensation.

The rigid 10-year fund model is outdated for companies staying private longer. The future is permanent capital vehicles with hedge fund-like structures, offering long durations and built-in redemption features for LPs who need liquidity.