Bradley Tusk, co-founder and managing partner at Tusk Venture Partners, told TechCrunch in today’s episode of Equity that VC as we know it is dead. And it has been for the last four years. 

“Maybe there’s some VC that I’ve never heard of that’s awash with liquidity the last couple of years, but we haven’t returned $1 in capital to our LPs in four years,” Tusk said. 

VC has had a rough couple of years thanks to higher-interest rates, crashed startup valuations from 2021 highs, and stymied IPO and M&A transactions. 

Many investors had been holding their breath for President Donald Trump to rejuvenate the VC landscape with deregulatory measures and pro-business tax reforms. However, the uncertainty following Trump’s record-breaking executive orders, tariff-fueled trade wars, and the dismantling of federal agencies have tempered the anticipated surge in VC activity. 

Or as Tusk put it, “I just don’t know many serious economists that think a trade war is a good idea for anyone’s economy.”

So Tusk is bowing out of the traditional VC model and has decided not to raise a fourth fund. Instead, he is shifting focus to an “equity-for-services” model, which allows Tusk to accept equity in exchange for helping startups navigate regulatory environments, legislative communications, and government procurement.  

For Tusk, equity-for-services goes back to his roots. In 2010, when he had just launched his political consulting firm Tusk Strategies, what was then a small transportation technology company called Uber enlisted his services. Uber didn’t have the cash to pay him, so they offered him equity. Tusk spent the next few years “running campaigns all over the U.S. to legalize Uber and ride-sharing.”

Creating regulatory frameworks for disruptive technologies to save startups from death by politics has been Tusk’s bread and butter for years, an expertise he earned through previous roles as campaign manager for Michael Bloomberg’s 2009 mayoral race and Deputy Governor of Illinois. 

All the “real VC stuff” like fundraising from LPs and “compliance, board seats, portfolio construction,” just started to feel like a distraction from the kind of work he actually loves doing.

And it feels like a shortcut to do the work he loves, while still actually making more money than he can make as a classic venture investor. 

“When I realized that I could just as easily get on cap tables and get equity from startups that I like in return for my expertise, the traditional model just didn’t make a lot of sense,” Tusk said. 

“I actually made more money when I was in equity-for-services because even though there’s less leverage than there is on a venture check, you keep 100% of the proceeds,” he said. “Whereas in traditional venture, I’ve got to return the investment capital to investors. I’ve got to repay the fees, then I’ve got to give them 80 cents on the dollar,” he said.

Tusk Venture Partners will continue to support its existing portfolio companies until the fund’s life cycle ends in 2031.