The venture capital industry, once characterized by an almost apprenticeship-style model and relatively swift exits, has undergone a profound transformation. As capital consolidates, companies remain private for significantly longer durations, and the traditional 10-year fund lifecycle proves increasingly ill-suited to modern market realities. In response to these systemic shifts, Matt Krna, a seasoned venture capitalist with decades of experience, has launched Two Meter Capital, a firm dedicated to providing essential "scaffolding" to support this evolving landscape. Operating under the innovative models of "GP on demand" and "harvest management," Two Meter Capital aims to optimize longer-lived portfolios, ensuring that entrepreneurs within these assets continue to receive championship-level support and that the venture flywheel maintains its crucial momentum.
An Odyssey Through the Evolving World of Venture Capital
Matt Krna’s career trajectory is a microcosm of the venture capital industry’s own evolution, marked by strategic foresight and adaptability. His journey began in the late 1990s, a formative period for the internet and technology sectors, as an analyst at Canaan Partners. There, he immersed himself in the foundational technologies of hardware and semiconductors, gaining an intimate understanding of deep tech investments. This initial grounding provided him with a robust analytical framework, crucial for navigating the nascent and often volatile tech landscape.
As the industry matured, so did Krna’s expertise. He transitioned to Investor Growth Capital, where his leadership acumen saw him rise to head the U.S. Internet investment practice. During this tenure, he not only steered significant investments in the burgeoning digital economy but also demonstrated an early recognition of emerging trends by co-founding the firm’s digital health effort. This move underscored a proactive approach to identifying and cultivating new investment verticals, a trait that would define his subsequent career choices.
A pivotal chapter unfolded when Krna was recruited to SoftBank. This was a period of ambitious expansion for the Japanese conglomerate, and Krna was instrumental in helping to raise a growth-stage fund. His tenure at SoftBank saw him and his partners back high-profile companies that would become household names, such as Fitbit, a pioneer in wearable technology, and BigCommerce, an e-commerce platform. Krna often reflects on this period with a sense of accomplishment, noting, "we actually did what we said we were going to do. It doesn’t always happen that way in the venture world." This statement subtly highlights the challenges and sometimes unfulfilled promises that can characterize the high-stakes world of venture capital, further solidifying his pragmatic approach to investment.
In 2015, building on the successes and lessons learned, Krna co-founded Princeville Capital, a successor fund designed to continue investing in growth-stage technology companies globally. Princeville further cemented his reputation as a discerning investor capable of identifying and nurturing companies with significant global potential.
The global landscape, however, was irrevocably altered by the COVID-19 pandemic. Like many industry leaders, Krna utilized this period of unprecedented disruption for reflection and strategic re-evaluation. He entered a phase of intense "noodling," as he describes it, pondering the future trajectory of the venture market. This introspective period, away from the immediate pressures of deal-making, was the crucible in which the concept for Two Meter Capital began to crystallize. After several years of meticulous development and strategic planning, the firm formally "hung its shingle" in 2024, poised to address a critical, yet often overlooked, segment of the venture ecosystem.
The Maturation of Venture Capital: A Call for Scaffolding
Krna’s vision for Two Meter Capital is rooted in a profound understanding of how the venture business has matured. What was once a relatively homogenous industry, often operating on an "apprenticeship model" with broadly similar firm structures and investment strategies, has evolved into a far more sophisticated and segmented market. This evolution has brought with it several defining characteristics:
Firstly, there is a clear trend of capital consolidation. A smaller number of increasingly large firms now command a disproportionate share of the venture capital market. These mega-funds often have the resources to deploy substantial capital, creating competitive pressures for smaller or emerging managers.
Secondly, and perhaps most significantly, companies are staying private much longer than ever before. The traditional path from seed funding to IPO, which historically averaged around six years, has stretched considerably. Current market data from sources like PitchBook and the NVCA indicates that the average time for venture-backed companies to go public has often exceeded 10-12 years, and in some cases, even 15 years. This protracted private tenure presents a fundamental challenge to the conventional venture fund structure.
Krna articulates this disconnect succinctly: "The 10-year fund life with two one-year extensions? That was an artifact someone came up with 30 years ago. The fact of the matter is, these portfolios just stay around for way longer." This observation highlights a critical structural mismatch: while investment cycles have elongated, the contractual lifespan of venture funds has largely remained static. The implications are far-reaching, leading to "tail portfolios" – older, often diverse collections of companies that continue to reside within funds whose active investment periods have long since concluded.
It is precisely this structural gap that Two Meter Capital aims to bridge by providing the much-needed "scaffolding" for the industry. The firm’s core offerings, "GP on demand" and "harvest management," are designed to address the inefficiencies and resource drains associated with managing these longer-lived portfolios. Krna posits that a venture firm’s primary competencies lie in raising capital, identifying outlier companies, and continuing to back their winners. Two Meter Capital steps in to manage "the rest" – alleviating General Partners (GPs) of the burdens associated with the tail end of their funds, thereby allowing them to focus on their core, forward-looking investment activities.
Why This Matters for Founders: Sustaining the Champion at the Cap Table
The services offered by Two Meter Capital extend far beyond mere back-office relief for GPs; they carry profound implications for the thousands of entrepreneurs whose companies reside within these aging portfolios. Within many tail portfolios, there are dozens, sometimes hundreds, of companies at various stages of development. Their original investors, while once deeply engaged, are often now preoccupied with raising and deploying capital for their newest funds. This can lead to a gradual, almost imperceptible, disengagement from older portfolio companies.
This is the critical gap Two Meter Capital fills. The firm’s team actively engages with these companies, providing the crucial oversight and strategic guidance that might otherwise diminish. They help clients – the original GPs – make informed decisions: identifying which companies are finally "hitting their KPIs" and warrant renewed support, which might require a strategic pullback, and which need assistance in charting their next steps, whether that involves further fundraising, a strategic sale, or a wind-down. By actively managing these assets, Two Meter Capital generates liquidity, which is essential for returning capital to Limited Partners (LPs) and, in turn, for keeping the broader venture capital flywheel moving.
Without this specialized "harvest management," founders in older funds could find themselves in an increasingly precarious position. They might perceive that their initial champions have quietly moved on, leaving them without a dedicated advocate at the cap table. This can manifest as a lack of strategic advice, reduced access to network connections, or an inability to secure follow-on funding from their initial investors. Two Meter Capital ensures that these founders retain a committed partner, providing continuity of support and strategic engagement even as their original fund matures. This commitment safeguards the entrepreneurial spirit and maximizes the potential for success for companies that, despite being in older portfolios, may still be on the cusp of significant breakthroughs.
Creating a Path Forward: Addressing Diverse GP Needs
Two Meter Capital’s clientele broadly falls into two distinct categories, each with unique challenges that the firm’s model effectively addresses.
The first category comprises mid-sized to large traditional venture funds. These firms are typically actively investing out of their eleventh or twelfth funds, yet simultaneously managing vast portfolios of 200 or more companies spread across funds seven, eight, and nine. The sheer operational burden of these older portfolios is substantial. A managing partner from such a firm candidly shared with Matt Krna that his firm was spending an estimated "$4 to $5 million a year just on partner and associate time tied up in board meetings for older funds." This anecdote underscores the significant drain on resources – both human and financial – that tail portfolios represent. By offloading this management, Two Meter Capital frees up senior partners to focus on new investments and their current, active funds, optimizing the overall efficiency and profitability of the venture firm. This service allows established GPs to maintain focus on their core competencies without neglecting their fiduciary duties to LPs regarding older assets.
The second category, where Krna’s framing becomes particularly distinctive and impactful, involves emerging managers for whom there won’t be another fund. The venture capital industry, while attractive, can be unforgiving. Many aspiring fund managers launch with ambition, but not all succeed in raising subsequent funds. For an entrepreneur whose startup encounters difficulties, there are often various "off-ramps": they can pivot, find another CEO, or gracefully exit the company. However, for an emerging fund manager who decides that venture capital isn’t their long-term calling, or who struggles to gain traction for a second fund, the situation is far more complex.
Krna highlights this asymmetry: "If you’re an entrepreneur and the company isn’t going the way you wanted, there are off-ramps. You find another CEO. You gracefully exit. If you’re an emerging manager and you decide this wasn’t for me, there’s no off-ramp. You’re responsible for that portfolio for the next 10-plus years." This long-term obligation can be a significant deterrent or a crushing burden for individuals whose primary focus has shifted.
By taking on a substantial portion – an estimated 90 percent – of this operational and fiduciary lift, Two Meter Capital effectively creates an "off-ramp" where none previously existed. This innovative solution provides a dignified and responsible exit strategy for emerging managers, ensuring that their LPs’ capital is still diligently managed and that portfolio companies continue to receive attention. Furthermore, Krna identifies a crucial second-order effect: the very existence of such a graceful exit mechanism may actually encourage more talented individuals to enter the venture capital industry in the first place, knowing that unforeseen circumstances or a change in career aspirations won’t trap them in a decade-long administrative quagmire. This could lead to a more diverse and dynamic pool of new fund managers, ultimately benefiting the entire ecosystem.
Optimism Rooted in Innovation and Strategic Impact
When asked what sustains his passion for the venture capital industry, Matt Krna’s answer is unequivocally centered on innovation. He has been a direct witness to, and participant in, multiple transformative technological waves. "The entrepreneurs are coming up with so many new concepts. I’ve been in the industry long enough to see multiple waves. The internet wave. Mobile. AI is poised to eclipse most, if not all of those. It’s going to be amazingly transformative for every aspect of society, in ways that I think 99 percent of people on the planet don’t appreciate." This deep conviction in the power of technological advancement fuels his engagement and reinforces the critical role that venture capital plays in bringing these innovations to fruition.
His optimism is also deeply personal, stemming from the unique niche Two Meter Capital is carving out within the industry. He reflects on his career in distinct phases: "I spent the first 10 years of my career apprenticing in this industry. The next 10, building a track record as an investor. This next chapter is maybe helping to change the paradigm a little bit, in a way that continues to bring our venture industry forward, more capable of ultimately supporting entrepreneurs and building." This statement encapsulates his ambition to contribute not just to individual company success, but to the structural integrity and efficiency of the entire venture ecosystem. By addressing fundamental inefficiencies, Two Meter Capital aims to make the industry more robust, more liquid, and ultimately, more effective at its core mission: funding the future.
The Significance Behind the Name: "Two Meter"
The firm’s distinctive name, "Two Meter Capital," carries a symbolic resonance rooted in Matt Krna’s personal life and values. It derives from water polo, a sport his children play competitively. In water polo, the "2 meter" position is strategically located right in front of the opposing team’s goal. This position is held by the player who embodies tenacity and determination – fighting for possession of the ball, muscling through formidable defenders, and ultimately, putting the ball in the cage. This powerful metaphor perfectly encapsulates the ethos of Two Meter Capital: a firm dedicated to actively engaging with challenging situations, pushing through obstacles, and ultimately achieving the desired outcome of liquidity and optimized portfolio performance for its clients. It signifies a proactive, results-oriented approach that is essential in navigating the complexities of tail-end venture portfolios.
As the venture capital industry continues its rapid evolution, firms like Two Meter Capital are emerging as essential components of its infrastructure. By providing specialized expertise and operational relief for managing mature portfolios, Matt Krna and his team are not only optimizing returns for LPs and freeing up GPs, but they are also ensuring that the spirit of innovation and entrepreneurial support remains vibrant across the entire lifecycle of venture-backed companies.
