The Fight to Control the Future: VC Kingmaking Meets Shared Governance

Across private markets, the most important signals right now come from how institutions create, store and distribute authority. Whether it is Netflix trying to absorb Warner Bros, the New York Times challenging Perplexity, or retail investors discovering the limits of Yieldstreet’s model, the pattern is the same. Financial outcomes are reflecting the architecture behind them.

This week, the private markets did not move on price action or sentiment. They moved on governance.

Investors are learning, again, that performance follows structure. Weak oversight lets cracks run through portfolios. Strong concentration of power creates speed but also excess. 

Shared authority builds resilience, but not always clarity. The new age of private capital is being shaped by how firms answer one question: Who gets to decide.

That is the signal worth tracking.

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Yieldstreet has reintroduced itself under a new name, Willow Wealth, and under a new mascot, Hampton Dumpty. The timing is difficult. The firm has informed customers of more losses, including defaults on projects in Houston and Nashville. 

These add about $41 million to the $167 million in previously reported losses. At least $208 million has now evaporated across its investor base.

The company has also removed a decade of performance data from public view. Real estate returns that showed negative performance are no longer displayed. 

This follows an earlier pattern in which the firm promoted the idea that private markets would provide both higher returns and lower volatility, even while the risks inside its own book were rising.

The broader lesson reaches beyond Willow Wealth. Private market products are being opened to retail investors at a faster rate than ever before. 

Platform fees remain high, often between 3 percent and 6 percent annually when you combine sponsor fees, fund-level fees and platform charges. These costs sit on top of illiquidity and sparse disclosure. When performance weakens, governance becomes the whole story.

Investor Signal 

Retail access to private assets only works when oversight is tight, information is clear and incentives are aligned. Willow Wealth is showing how quickly the opposite structure can break down.

The New York Times has filed a new copyright lawsuit against Perplexity after more than a year of warnings and cease-and-desist notices. 

The suit accuses Perplexity of pulling Times content without permission and reproducing it in near-verbatim form across text, audio and video formats. It also claims the AI assistant fabricated material and attributed it to the newspaper.

The Times is asking the court to force the removal of all Times content from Perplexity products. The Chicago Tribune has filed a similar suit. These actions arrive as several publishers are moving toward partnerships with AI companies while others pursue aggressive litigation. 

It is a split strategy across the industry that reflects the same question facing regulators and investors. How do you protect intellectual property while also trying to benefit from the scale advantages AI systems create.

This is another governance story. Perplexity has grown fast by pushing the limits of content usage and by assuming that rapid model performance justifies broad data access. Traditional media companies are drawing a line where internal controls at AI firms have not.

Investor Signal 

The tension between scale and permission is now central to every AI investment. Companies that control their data pipeline and maintain clear licensing structures trade at a premium for a reason. The legal landscape is not an afterthought. It is a competitive filter.

Netflix has announced a 72 billion dollar deal to acquire Warner Bros Discovery’s film studio and HBO Max. 

The Trump administration has responded with what it calls heavy skepticism. Congressional leaders from both parties have raised concerns about market power, viewer choice and Netflix’s position in the global streaming economy.

The Department of Justice will review the transaction under a competition framework that prioritizes worker outcomes, consumer affordability and innovation. These are the themes DOJ leadership has emphasized since taking office. 

Netflix argues the deal adds content and lowers cost per subscriber. Critics argue it reduces choice and gives the company too much influence over production and distribution.

For investors, the path is clear. Streaming is entering a consolidation phase, and regulatory pressure will rise with each step. The winners will be the platforms that can prove they create value across the ecosystem, not only inside their own catalogues.

Investor Signal 

When scale becomes the primary asset, regulators become the primary risk. Investors should expect long review periods and high scrutiny for any deal that centralizes content libraries.

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Venture capital is changing again. Not in the usual cycles of risk-on and risk-off, but in the deeper structure that governs how decisions are made inside firms and inside markets. Two stories stood out this week because they describe the two ends of the spectrum.

One is Sequoia’s decision to remove the idea of a single leader at its $9B hedge fund and move to a shared leadership model they call No Kings. The other is the surge of kingmaking across AI categories, where top-tier venture firms are selecting their winners early and flooding them with capital to shape entire markets before those markets have formed.

Together they describe a shift in how power is created in private markets. Inside firms, power is being spread. Across markets, power is being concentrated. And investors need to understand both sides.

For years, Sequoia Capital Global Equities operated with a traditional hedge fund structure. One senior leader set the tone, made the calls and received a large share of the rewards. 

After performance softened and internal complaints rose, Sequoia pivoted to a structure built around four leaders with distributed authority. It was a move that broke from the standard model in which investors and clients prefer a single point of responsibility.

The firm wants the hedge fund to look and behave more like Sequoia itself. Longer time horizons, shared judgment, more guardrails and clearer incentives. 

By spreading authority, Sequoia reduces the risk of overconfidence, temperament issues and cultural breakdowns. By keeping decision makers closer to the rest of the partnership, it keeps governance tight.

For investors, the message is simple. When a fund builds a culture around one person, the environment becomes more fragile. When a fund breaks that center of gravity, culture stabilizes but decisions can slow. 

Either path carries a cost. Both need to be understood before you measure performance. The most important idea is not who leads the fund. It is how decisions are created.

If Sequoia is spreading power inside the firm, many VCs are doing the opposite outside it. The pace and size of early stage AI funding has changed the dynamics of competition. 

A startup can have less than a million dollars in annual revenue and still raise a 60 or 90 million dollar round. Investors are writing large checks with the goal of reshaping categories by force.

This is the core idea of kingmaking. A firm selects its champion early and backs it at a level of capital that rivals cannot match. 

The size of the round sends a signal to customers, recruits and future investors that the category has a leader. Revenue may be modest, product development may be early and margins may not exist, but perception is the strategy.

The logic is simple. If markets move faster than the traditional growth curve, the investor who picks the winner early captures the entire power law. 

If the market slows, the investor loses the premium they paid. The tradeoff is speed versus accuracy. The payoffs are large, but the risks are larger.

This trend is strongest in AI application layers like enterprise tools, IT automation, SOC compliance and ERP systems. Founders raise a Series A, then a Series B only weeks later, often without new data in between. That is a structural break from past cycles. It rewards fast movers, not deep diligence.

Kingmaking is not new, but the timing is. It used to begin when companies were growing fast and proving traction. Now it begins before the market has even chosen its preferred product.

It just signed a deal to get its tech in Apple's iPhone until 2040! Online commenters are debating if this brand-new company will be the 7th trillion dollar stock. 

Details on the controversy here.

The Sequoia restructuring and the kingmaking surge look like opposites. One spreads authority. The other concentrates capital. But they sit on the same axis.

Both are responses to faster markets. Both are attempts to shape outcomes before the environment takes over. And both show that the most important investments being made right now are in structure.

The firms that spread authority are trying to avoid reflexive errors. The firms that concentrate authority are trying to anchor a category in place. The pattern is not about personalities or style. It is about risk.

You can push power down to create stability or you can lift power up to create speed. But you cannot do both at the same time. Investors need to know which mode a fund or a startup is in.

This is why the private markets are difficult to generalize. Two firms can hold the same assets and produce very different outcomes because the architecture behind them is different.

One may rely on a star portfolio manager. One may rely on a committee. One may rely on valuation momentum. One may rely on execution. One may use capital to shape outcomes. One may use capital to follow outcomes.

The through line is clear. Power determines performance.

Leadership models are not cosmetic. They are risk controls. The same is true for early stage capital models. They reveal how firms identify risk, distribute authority and measure success.

A practical step for investors is simple. When evaluating a fund manager or a platform, ask explicit questions about decision making. 

Who has final authority? How is disagreement resolved? How is profit shared? How quickly do they fund new rounds? Do they believe in conviction or consensus? Do they use capital to shape markets or to follow them?

Once you understand the structure, the strategy becomes clear. And once you understand the strategy, the risk becomes measurable.

Investors who evaluate structure first and performance second will have an advantage in this environment. The firms that survive the next cycle will be the ones whose governance matches their ambition.