On Tuesday night, the NEVCA hosted a members-only event at KPMG entitled “How Venture Capital is Getting Disrupted and What You Can Do About It.” Our presenter was Gaurav Jain, a Principal at Founder Collective and a 2013 graduate of Harvard Business School.

In his last year at HBS, Jain decided to apply Clay Christensen’s disruption theory to the world of venture capital, and, in conducting his research, gained access to VC legends such as Arthur Rock and Chuck Newhall. What he discovered, as the event’s title suggests, is that disruption is occurring in venture capital, and smart firms will have to adapt in order to succeed.

But what’s actually causing this disruption? The answer is simple. In Jain’s view, the Internet “has resulted in fundamental, tectonic shifts in the larger ecosystem that will affect venture capital in a meaningful way.” For most of today’s entrepreneurs, business can be done 98% more cheaply than it could pre-Internet. That valuable mentorship VC firms offer? Entrepreneurs can use their online networks to access it. And they can rely on accelerators for those early-stage investments that are so crucial in getting a business off the ground. Furthermore, platforms such as AngelList and LinkedIn are making it easy for entrepreneurs to access investors and democratizing deal flow.

So what can VCs do? Follow the example Christensen outlines in Innovator’s Solution, and create disruption themselves. Jain shared an analogy for the three approaches VCs might take in countering this disruption.

1.     First: the Apple approach — Build your own platform (i.e. proprietary deal flow and support staff) that is highly differentiated, innovative and first-to-market. This is a tough strategy to pull off because you need to keep introducing innovation after innovation. But when executed well, it can help you stand out.

2.     Second: the BlackBerry approach — Undifferentiated offering with a legacy business model that does not meet the needs of the consumers today. Unfortunately, this where a lot of VCs are stuck. Their business has not changed much in the last few decades while the world around them has transformed substantially.

3.     Third (and best, in Jain’s opinion): the Android approach.

“AngelList will become the Android of Venture Capital,” Jain predicted. Like Android, AngelList is a platform that will unite the entire startup community, and successful VCs will augment that platform in a way that adds value to the ecosystem. They’ll build “apps” that help entrepreneurs recruit talent, for example, and, in doing so, they’ll also differentiate themselves from the competition. It will be futile for most VCs to try to recreate what AngelList will be able to do, and will be in their best interest to leverage the platform to deliver differentiated value.

The major takeaway from Jain’s presentation is that the VCs who survive this disruption are the ones who will do some real self-examination, and hone in on the one thing that sets them apart from their peers. Like what? Maybe your VC firm is known as especially founder-friendly, because your partners were also founders, once upon a time. Or maybe you’ve figured out how best to leverage your portfolio network in order to provide your entrepreneurs with the peer-to-peer support they so need. Either way, Jain reminded us, “entrepreneurs can have their pick of investors, and they’ll want more than just capital” from the firm they choose.

You can follow Gaurav Jain on Twitter @gjain.