fred_wilson_2Over a year ago, Union Square Ventures partner Fred Wilson said something that sounded a bit odd: He didn’t believe the venture capitalist business was sustainable in its current iteration.

At the time, it seemed like a reaction to then recent events. The Kaufman Foundation had just issued a report detailing the poor returns that the venture capital business has delivered for well over a decade. In addition, the rise of things like Kickstarter, angel investors, and accelerator programs were coming to the forefront.

But that was almost a year ago, and things have changed, right? For Wilson, no. At last Thursday’s PandoMonthly, Wilson returned to this simple thesis and stated, “I believe that the venture capital business as we know it will not exist in 25 years.”

Wilson knows a bit what he is talking about, having been in the venture capital world for some time. He has been investing in startups since the early 90s, founded Flatiron Partners in 1996, witnessed and attended to the collapse of the dotcom boom in the early 2000s, and then resurfaced as one of the most powerful investors of the 21st century. In 2012 he was named the 20th top tech investor on Forbes’ Midas List.

So is he professing the end of his industry as we know it? Not quite. What he believes is going to change down the line is asset aggregation. His reasoning: The way that assets are aggregated currently is simply “unsustainable.” There’s just too much money going into closed-in funds, and these other ways of funding are outperforming VCs.

Wilson has seen technology and businesses change with the changing landscape of the market, but the business model of venture capitalist has remained almost the same for decades. Now things are starting to change: “Technology is allowing money to be aggregated and invested and allocated in ways that weren’t possible 20 years ago.”

Will venture capitalists just cease to exist? Not quite, their roles will just change. He sees deal selection and post-investment governance as still a crucial VC role. It’s just the way they invest that will probably adapt.

While he will probably be retired 25 years down the line, these comments highlight Wilson’s attempt to leave a blueprint for future investors. He has witnessed the volatile market for over two decades, and he thinks that the way he has invested just won’t cut it down the line.

Instead, he sees a new way for startups to flourish, one that takes into account new ways of aggregating funds. In his words, a more sustainable funding model would be one where “everybody could participate.”

This is how he he explained it to Sarah Lacy last Thursday: