View from Seed

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Why LP’s Passed on Seed Funds 10 Years Ago (And What’s Happened Since)

View from Seed

The reality is that seed investing as a strategy was not a new thing back in 2011, and one could point to multiple prior waves where this sort of investing just didn’t work. When we started in 2011, YC was in its awkward growth/teenage years as they were expanding the classes pretty aggressively. That year, they invested in Segment.

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The Midas List Then and Now

View from Seed

Interestingly, it looks like the Midas List skipped 2010 and changed methodologies considerably in 2011, so you’d need to wait until 2021 to do a true look back. Since I’m mainly doing this for my own interest and this isn’t supposed to be a scientific analysis, I’m going to instead look at the 2019 list and compare it to the 2009 list.

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State of VC 2.0

View from Seed

One thing that jumps out quickly is that TVPI between 2004-2010 (avg 2.6x) has underperformed 2011-2017 (avg 3.0x). So, let’s just look back 10 years to the 2011 vintage. But what do we see from some of the more recent (but mature) vintages? Was this a lost decade for venture capital? The answer is likely a mix of both.

Valuation 319
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How is the VC Asset Class Doing?

View from Seed

In fact, the top quartile TVPI of the 2011 vintage is 2.6, If you look 5 years later at the 2012 vintage, top quartile TVPI is 2.29. That’s only 0.5X worse than the vintage that is 5 years older. nearly the same as 2007. The top quartile DPI for the 2012 vintage is 0.62.

LP 256
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What’s new with NextView? The story behind our NextView.vc website refresh

View from Seed

And within NextView, we’ve certainly undergone a myriad of changes ourselves (who remembers our craft beer branding circa 2011? But in all seriousness, with all that has changed within the VC industry as a whole, my general takeaway is that as a firm, NextView’s core ethos and investment style have remained overwhelmingly the same.

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State of VC 2.0

View from Seed

One thing that jumps out quickly is that TVPI between 2004-2010 (avg 2.6x) has underperformed 2011-2017 (avg 3.0x). So, let’s just look back 10 years to the 2011 vintage. But what do we see from some of the more recent (but mature) vintages? Was this a lost decade for venture capital? The answer is likely a mix of both.

Valuation 295
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10 Reflections After 10 Years of NextView

View from Seed

This was in 2011, and I still remember that warning. Some folks in the audience jeered because I was young, inexperienced, and hadn’t been an investor when the internet bubble burst. What I was purporting was just “the greater fool theory”. I’m glad I didn’t listen.

IRR 205