Both Sides of the Table

MARCH 1, 2016

At the Upfront Summit in early February, we had a chance to have many off-the-record conversations with Limited Partners (LPs) who fund Venture Capital (VC) funds about their views of the market. In fact, if you add the capital flows of the past ten years, there have been just shy of $50 billion in net cash outlays.

Venture Capital 150

Venture Capital LP Silicon Valley Marketing 150

Both Sides of the Table

JULY 16, 2010

Consumers pulled their money out of these risky investments, but when LPs make commitments to VC funds they make 10-year, legally binding commitments. So as of 2008 total LP commitments were still at nearly $250 billion. I was at dinner with a large LP and mentioned that I had heard the industry would shrink by 50%.

Technical Review 311

Technical Review LP Early Stage Silicon Valley 311

VC Adventure

MAY 5, 2022

Traditionally LPs have viewed this as positive. The fund is investing profits, the LP is paying fees on what effectively becomes a smaller fund (in my example above, if the fund invests 110% of the fund, LPs were actually paying a 1.8% management fee). Some of those companies will be successful.

IRR 116

IRR Metrics Valuation LP 116

This is going to be BIG.

JULY 30, 2015

One of the first things I did when I joined the venture asset class as a lowly institutional LP analyst in 2001 was to build the VC fund cashflow model. so that's what I said my exits would be as a seed stage fund. Do seed investors have Limited Partners with different return expectations than Series A and beyond investors?

Venture Capital 60

Venture Capital Pre-Money Valuation IRR Valuation 60

Genuine VC

OCTOBER 11, 2011

I hypothesized that, “Perhaps a contrarian statement in this environment: but even though there’s been a dip in fund size due to broad economic factors and LP appetite, it wouldn’t surprise me if the truly top firms raise even larger funds over the coming decade.”

Venture Capital 150

Venture Capital Seed Stage Entrepreneur LP 150

Hunter Walker

FEBRUARY 25, 2018

“What did you change about Homebrew III to better fit ‘seed phases’ versus seed rounds ?” One consistent LP complaint I hear about new’ish fund managers is that they forget a bunch of fund construction and portfolio modeling decisions are connected. a fellow VC asked me after my previous post. That’s a great question!

Product 82

Product IRR LP Portfolio 82