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How Private Equity and Venture Capital Investors Are Eating Their Own Dogfood

David Teten

An investor had few hard metrics other than the actual financials, and little technology to make the process scaleable. Over the past few decades, better metrics became available, and investors could take a more analytical, data-driven approach. ” Historically, investing was a manual, artisan process. 2) Raise capital.

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VCs eating our own dog food: Using technology and analytics to make better investments

David Teten

However, in private markets, there is more room to optimize across all 11 steps of the investing process: firm management , marketing, fundraising , origination , manage relationships, due diligence, negotiation, monitoring, portfolio acceleration , reporting, and. 1) Manage the firm . This is harder than it sounds.

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High Returns On A Small Fund Challenge Low Returns On A Big Fund

David Teten

The Kauffman Foundation points out several reasons why they choose to keep pouring capital into the industry: the J-curve narrative, VC investment allocation mandates (which should disproportionally benefit large funds), the “relationship business” philosophy, and potentially misleading return metrics (such as IRR).

LP 114
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On the Road to Recap:

abovethecrowd.com

All Unicorn participants — founders, company employees, venture investors and their limited partners (LPs) — are seeing their fortunes put at risk from the very nature of the Unicorn phenomenon itself. These mutual funds “mark-to-market” every day, and fund managers are compensated periodically on this performance.

IPO 40