All Things VC

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All Things VC - October 23' Edition

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Tweets, nuggets & more

Samir Kaji

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samir kaji on Twitter / X I often see LPs come to binary, rigid conclusions on things like fund size (bigger is worse) or portfolio construction (more companies is better) or focus (specialists > generalists). While fun to talk about, they don't account for the necessary nuances that matter (and often…— samir kaji (@Samirkaji) October 19, 2023 x.com⁠

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Meghan Reynolds

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Meghan Reynolds on Twitter / X Heard from VC LPs this week - contrasting convos🤔1)Pension starting VC now- (access/AI supercycle) vs Family office slowing VC -“excess capital/elevated prices here to stay”2)Top placement agent (“impossible to raise”) vs 2 spinout GPs (“demand is there”)Sounds like thawing— Meghan Reynolds (@MeghanKReynolds) September 30, 2023 x.com⁠

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Meghan Reynolds on Twitter / X Heard from VC LPs this week, some perspective on fundraising volume: I think the ‘23 figure below is overstated as most of that capital took a year or more to raise. Word from LPs is how few funds have raised this year w/ most pacing slowing dramatically / raises pushed to ‘24 pic.twitter.com/CAgfitU4ra— Meghan Reynolds (@MeghanKReynolds) October 22, 2023 twitter.com⁠

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Meghan Reynolds on Twitter / X Heard from VC LPs this week: - Discussion of the secondary market (funds that buy LP stakes in funds and portfolio companies interests from GPs)- Buyout funds have been using this capital to manufacture DPI for many years. When will this become standard in VC?— Meghan Reynolds (@MeghanKReynolds) October 8, 2023 x.com⁠

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James Sedgwick-Heath

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Memes and more

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Articles & Posts

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`JAMESIN SEIDEL`⁠
- A Deep Dive into Q3 2023's Funding Landscape

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Jamesin Seidel | Substack Early-stage investor @ Chapter One substack.com⁠

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Acadian Ventures Venture Capital in Silicon Valley is Broken

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James Heath - There aren't many LPs in the market right now, but those who are will reap the largest rewards

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LPs 101 — what are limited partners, and what do they look for in VCs?

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LPs 101 — what are limited partners, and what do they look for in VCs? Here’s what you need to know about the folk who invest in VC funds… and what they actually want from investors. sifted.eu⁠

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SiftedEU - European founders are backtracking on employee equity. It’s not a good idea

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Niraj Pabari - Secondaries can be so important for founding teams to cash out when the time is right.

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Summary of why the big exits you see, aren’t really what you think

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Search Funds - With the surge in popularity of search funds, new investors are flocking to get a piece of the action.

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Alan Vaksman - VC is in the middle of a generational shake-up

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Kanwal Rekhi on VC Economics
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Bridge Financing: When Venture Capitalists Throw Good Money After Bad

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Greg Head - What percentage of the pitches they see will be great SaaS businesses for the founders but aren't a fit for their fund?

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Michael Jackson - Horizon Europe successor fund

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The EU’s next seven-year science funding programme has to have a budget of €200B...more than double Horizon Europe’s budget of €95.5B

Dave McClure and David Zhou - how VCs should think about selling mature VC portfolio assets

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News & Reports

CBInsights - State of Venture Q3’23 Report

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Global venture funding increases 11% QoQ to $64.6B.

New unicorn births drop 40% in Q3’23 to the lowest total in years.

The global IPO market continues to rebound, with IPOs up 24% QoQ.

Half of the top 10 largest equity deals go to the electric vehicle industry.

Europe leads global exit share at 38%, with the US close behind at 35%.

PitchBook-NVCA Venture Monitor

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Q3 2023 PitchBook-NVCA Venture Monitor | PitchBook The Q3 2023 PitchBook-NVCA Venture Monitor presents a data-driven overview of the key trends defining the US venture capital landscape. pitchbook.com⁠

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PitchBook Analyst Note: Global VC Ecosystem Rankings

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PitchBook - European Venture Report

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Q3 2023 European Venture Report | PitchBook The Q3 2023 European Venture Report presents a data-driven overview of the key trends defining the European venture capital landscape. pitchbook.com⁠

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Snippet from the report

PitchBook’s Q3 2023 European Venture Report shows that startups have raised €43.6 billion in the first nine months of this year—nearly 50% lower than in the same period in 2022. While the drop is significant, this year’s annual deal value figure is on track to reach pre-2021 levels, signalling that Europe’s venture market has still experienced long-term structural growth.

Carta - Why are seed stage valuations immune to decline?

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PitchBook - VCs hope plunging IRR is behind them

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VCs hope plunging IRR is behind them - PitchBook After about half a decade of registering double-digit percentage returns in nearly every quarter, venture capital's performance has reversed dramatically. pitchbook.com⁠

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The global VC market continues to stumble

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PJT Park Hill - Q3 2023 secondary market overview by

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Andrea Carnelli Dompe' (PhD) on LinkedIn: Q3 2023 - Secondary Market Overview - PJT Park Hill 🚨The Q3 2023 secondary market overview by PJT Park Hill is out - key highlights: 👇 ‣ Buyout pricing has improved to 90-95% of NAV ‣ Venture / Growth… www.linkedin.com⁠

CrunchBase - European Venture Funding Slows Further At Seed And Early Stage

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European Venture Funding Slows Further At Seed And Early Stage Funding to European startups reached $16.4 billion in Q3 2023 — up by 28% quarter over quarter and flat year over year. news.crunchbase.com⁠

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Research - The impact of founder personalities on startup success

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Snippet from the report

1) We show that founder personality traits are a significant feature of a firm’s ultimate success.

2) We find that the Big Five personality traits of startup founders across 30 dimensions significantly differ from that of the population at large.

3) Key personality facets that distinguish successful entrepreneurs include a preference for variety, novelty and starting new things (openness to adventure), like being the centre of attention (lower levels of modesty) and being exuberant (higher activity levels).

4) We do not find one ’Founder-type’ personality; instead, six different personality types appear.

General Catalyst joins forces with an European VC

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Our Growing Family: GC x LF | General Catalyst Announcements www.generalcatalyst.com⁠

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Sifted EU- European VCs’ market sentiment is at record low

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The

European Investment Fund (EIF)⁠

surveyed almost 500 VCs to get their views on the state of the market. It doesn’t give much to be hopeful about.

👉 70% of VCs say the fundraising environment is bad or very bad — and almost two-thirds think it will get worse or remain the same in the next 12 months. 👉 28% of VCs say their investment activity has decreased 👉 Nearly half of VCs say competition for deals has decreased 👉 Two-thirds of VCs say portfolio company valuations have fallen 👉 72% of VCs, the exit environment has significantly deteriorated in 2023 — although half think it’ll get better next year.

- 70% of respondents share gloomy VC perceptions about fundraising in 2023, with two of the top three VC challenges related to fundraising. - Almost 80% of fund managers fear that if interest rates remain high, LPs’ appetite for venture capital will shrink - VCs report a slower pace of new investments and difficulties in finding co-investors, resulting in decreased competition among investors and entry prices. - More portfolio companies underperformed expectations in 2023, with increased insolvency expectations and deteriorating access to external finance. - Top challenges for VC portfolio companies remain equity financing, recruiting professionals, and customer acquisition. - The exit environment worsened in 2023, with a shift away from IPOs and trade sales to more insolvencies and secondary sales. - Key challenges in the exit environment include insufficient IPO market liquidity and finding potential buyers.