Miles

Investment professional managing Carnegie Mellon University's $4 billion endowment, with a focus on venture capital.

Mentions

Appeared in

Discussed in

Key positions and views

The venture capital asset class is unsuitable for the vast majority (90%) of Limited Partners, as they are not adequately compensated for the inherent risks and illiquidity. [13, 22]

Large, multi-stage venture funds are structurally challenged to produce high returns due to their size and should adopt lower fee structures (e.g., 1% management fee and 10% carry) akin to public equity funds. [4, 23, 34]

Manager selection is paramount, with 'picking skill' being the dominant success factor for early-stage funds, and GP commitment being one of the best quantitative predictors of future returns. [1, 15]

The current market is experiencing a severe liquidity and fundraising crisis, and a cyclical correction, particularly the popping of an AI bubble, is a near-inevitability based on historical parallels. [3, 9, 14]

Index Ventures is the single best-performing venture capital firm at scale, demonstrating excellence through its portfolio holdings in companies like Figma, Dream Games, and Wiz, and its discipline in fund sizing. [25, 35, 38]

Podcast consensus on Miles

Points of consensus

▶Miles consistently argues that the venture capital industry's structure, particularly for large multi-stage funds, is misaligned with Limited Partner (LP) interests, citing mis-sized funds, excessive fees, and poor risk-adjusted returns [4, 5, 13, 23, 34].Mar 2026

▶He repeatedly emphasizes the critical importance of manager selection, highlighting that only a small fraction of VCs (top-decile) consistently outperform public markets and that picking skill is the dominant factor for success in early-stage investing [1, 2, 15, 22].Mar 2026

▶Miles's analysis points to a severe, ongoing liquidity and fundraising crisis in venture capital, referencing historical lows in fundraising, a moribund IPO market compared to past eras, and the underperformance of recent public offerings [3, 9, 24].Mar 2026

▶Across his claims, Miles identifies specific firms as exemplars of positive or negative behaviors, consistently praising Index Ventures for performance and discipline [25, 35, 38] and Union Square Ventures for liquidation strategy [36], while criticizing anonymous GPs for misleading LPs [5] or improper portfolio marking [40].

Points of debate

▶Miles's assertion that 90% of LPs should avoid venture capital [22] directly challenges the widespread industry narrative of VC as a necessary component of a diversified institutional portfolio.Mar 2026

▶His proposal that large growth-stage VC funds should charge low 'one and 10' fees [4] is a direct critique of the industry-standard 'two and 20' model, which is rarely contested publicly by LPs.Mar 2026

▶While the market is broadly bullish on AI, Miles expresses significant skepticism, predicting an AI bubble will pop [14], questioning the long-term independence of leaders like OpenAI and Anthropic [11], and highlighting OpenAI's massive burn rate [17].Mar 2026

▶Miles's calculation that a large multi-stage fund needs to generate nearly $800 billion in market cap to achieve a 4x return [34] presents a quantitative argument against the viability of the mega-fund model, a strategy pursued by many of the industry's most prominent firms.Mar 2026

Key themes

▶LP Skepticism and Misaligned IncentivesMar 2026

Miles consistently argues that the venture capital asset class is structured to benefit General Partners (GPs) over Limited Partners (LPs). He believes LPs are not adequately compensated for the risks they take, that 90% of them shouldn't invest in the asset class at all, and that GPs often mislead them about fund sizes. [13, 22, 5]

Investors should approach venture capital with extreme caution, focusing on the structural flaws of the asset class and questioning whether the potential returns justify the illiquidity, fees, and risk, especially in large, multi-stage funds.

▶The Math of Venture Capital ReturnsMar 2026

A core theme is the quantitative difficulty of generating venture-like returns at scale. Miles provides specific calculations, such as the $800 billion in market cap needed for a $7 billion fund to 4x, to argue that the mega-fund model is mathematically challenged to deliver on its promises. [34, 23, 19, 21]

Analysts must scrutinize the portfolio construction and exit market cap requirements of large funds, as the sheer scale may make historical return profiles unattainable.

▶Market Cycles and the Liquidity CrisisMar 2026

Miles provides a stark picture of the current market environment, characterized by the lowest fundraising levels since 2016-2017 and an IPO market weaker than it was two decades ago. He anticipates a cyclical correction, particularly an AI bubble pop, but predicts a potential recovery in liquidity events around 2026. [3, 9, 14, 33]

The current downturn is not a minor blip but a significant structural reset, and while a recovery is expected, the timing and nature of that recovery remain uncertain and contingent on macroeconomic factors and M&A activity.

▶Manager Selection as the Primary AlphaMar 2026

In an industry with mediocre median returns, Miles asserts that manager selection is the key determinant of success. He distinguishes between access and picking skill for different fund types, identifies GP commitment as a key predictor, and names specific firms like Index Ventures and Union Square Ventures as best-in-class operators. [1, 15, 36, 38]

For LPs who do invest in venture, success is not about asset allocation but about identifying and accessing a very small cohort of elite, disciplined, and well-aligned fund managers.

Source episodes

Sentiment over time

Not enough data for timeline

Changes over time

2002-2004

Miles references this period as having a more robust IPO market in terms of capital raised than the 2022-2024 period, despite the venture asset class being ten times smaller. [9]

2012 & 2014

Cites the IPOs of Facebook (2012) and Alibaba (2014) as the two largest venture-backed IPOs in history, setting a high watermark for exit valuations. [8]

Post-2017

Identifies the launch of SoftBank's Vision Fund 1 as the catalyst that prompted other major venture firms to significantly increase their fund sizes, shifting the industry towards the mega-fund model he now critiques. [7]

2021

Describes this year as the market peak, characterized by extremely high public market multiples (20x median, 40x top-quartile for software ARR) and a wave of IPOs, most of which are now trading significantly below their offering price. [20, 24]

2024 (Current)

Characterizes the current environment as a severe downturn, with US and European venture fundraising on track for the lowest levels since 2017 and 2016, respectively. [3]

2026 (Predicted)

Predicts that 2026 will be a significant year for venture capital liquidity events, potentially marking a turn in the current cycle, citing pending large-scale deals for companies like Wiz and Figma. [33]

Suggested prompts

How does Miles's mathematical framework for a $7B fund's return potential challenge the viability of the mega-fund model in venture capital? &nearr;Given Miles's view that 90% of LPs shouldn't be in venture, what specific criteria does he imply the top 10% of LPs (like Carnegie Mellon) possess to succeed? &nearr;Miles identifies an AI bubble and significant business risk for OpenAI/Anthropic. How does this contrast with the massive CapEx spend by hyperscalers he also highlights? &nearr;What are the contradictions between Miles's praise for top-decile managers and his overall bearishness on LP compensation and the asset class for most investors? &nearr;

Key concepts

Venture Capital Fund Performance 7 ep Limited Partner (LP) Perspective 5 ep Market Cycles & Liquidity 5 ep AI Industry Analysis 4 ep Endowment Management 5 ep Firm-Specific Analysis 6 ep Public Markets & Valuations 5 ep Geopolitical & Regulatory Factors 2 ep

Notable quotes

“Do you think LPs are getting paid for the risks that they are taking in Vastian Venture? Absolutely not.”

Miles · Miles Dieffenbach: Inside Carnegie Mellon’s $4BN Endowment & The Math Behind DPI, TVPI, Illiquidity

“90% of LPs shouldn't be investing in venture.”

Miles · Miles Dieffenbach: Inside Carnegie Mellon’s $4BN Endowment & The Math Behind DPI, TVPI, Illiquidity

“But those growth funds that are really for scaled businesses that are mature assets, like you should be charging long-only public equity fees, which are one in 10.”

Miles · Miles Dieffenbach: Inside Carnegie Mellon’s $4BN Endowment & The Math Behind DPI, TVPI, Illiquidity

“Who is the single best performer to you at scale? Index. I think they have to be.”

Miles · Miles Dieffenbach: Inside Carnegie Mellon’s $4BN Endowment & The Math Behind DPI, TVPI, Illiquidity

Report last updated: Apr 21, 2026

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