Strategy & Portfolio
Style Drift
When a fund deviates from its stated investment strategy, such as investing outside its target stage, sector, or check size.
Style drift occurs when a GP invests outside the fund's defined strategy, whether by check size, stage, sector, or geography. LPs commit capital based on a stated strategy, so style drift violates the mandate. Common causes include FOMO on hot deals, exhausted deal flow in the target segment, or pressure to deploy capital. LPAs typically include investment restrictions to limit drift.
In Practice
A seed fund that normally writes $1-2M checks invests $8M in a Series B deal for a hot company. This style drift concentrates the fund in a single bet outside its expertise and reduces capital for its core strategy.
Why It Matters
Style drift is one of the most common ways VCs destroy value. LPs monitor for drift because it indicates discipline problems and increases risk beyond what they signed up for.
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