The venture capital landscape is undergoing a structural shift that's reshaping how firms compete and survive. According to recent industry analysis, success increasingly requires choosing a clear path: either scale up as a generalist powerhouse or go deep as a specialist player. The uncomfortable middle ground? That's where most midsize generalist funds struggle. They lack the resources and brand pull of mega-funds while missing the specialized expertise that boutique firms leverage. Being moderately sized with a broad mandate leaves you vulnerable from both angles—losing deals to larger competitors who can write bigger checks and move faster, while specialist firms poach deals in their focused verticals. The consolidation pattern is clear: the VC market is bifurcating into winners and squeezed players, forcing difficult decisions about identity and positioning.