It's way harder to differentiate as a VC than as a startup.

Most VC funds are pushed by their investors to show how they differentiate when they either don't or they do and it hurts them.

They either:

1. Say they invest in a niche and in doing so rule themselves out of most of the market.
2. Define their areas of interest so widely that it looks like they have them but they actually invest in everything, or
3. Say it's by value add. This is important but, as every founder knows, is usually more words than actions.

In practice, most funds are alike. What really makes a difference is if founders want them in their rounds (= brand + reputation) and if they are good at choosing.

For choosing, it's all about process. And almost every VC process is largely the same.

More on process another time.