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How Do VCs Mitigate Risk In Their Investment Portfolios?

Ask The VC

Question: How do VCs mitigate risk in their investment portfolios? Are In many cases, they are prohibited from doing this by their LP agreements and/or investment documents in the companies when they make an investment. While I’m sure there are some folks that do this, I don’t believe it’s prevalent.

Investors Updating Their Investors: Inside Homebrew’s First Annual LP Meeting

Hunter Walker

Last week we held our first annual LP meeting, when venture funds get their investors together with updates on operations and results.

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Who Invests In Investors: Homebrew LP Shares VC Performance Goals, Importance of Diversity & What They Look For In New Funds

Hunter Walker

Anne Dinneen: Nothing has contributed more to the growth of the Irvine endowment over the years than our venture portfolio. AD: Yes.

LP 38

Announcing K9 Ventures, L.P. – a seed stage fund

K9 Ventures

I’m pleased to announce the formation of K9 Ventures, L.P. K9 Ventures, L.P. K9 expects to be an active investor in portfolio companies and will typically make only 4-6 new investments per year. K9 began investing in 2009 and is honored to have the following five companies in its portfolio: CrowdFlower (Seed and Series A).

Where Does VC Money Actually Come From? [Flowchart]

View from Seed

Some institutional investors simply aren’t big enough to have in-house employees to vet and manage a portfolio of VC funds. Endowments.

LP 155

Embracing Your Community as a Strategy

Both Sides of the Table

We would invite every VC in town, as many high-calibre LA founders as we could (whether we invested in them or not) and all of our portfolio companies.

Why Successful People Focus on the Bottom End of the Funnel

Both Sides of the Table

” I recently helped a portfolio company with recruiting a critical, company-changing key exec (that I hope will be announced next week).

LP 155

What Do Industry Insiders Think Will Happen in VC in 2016?

Both Sides of the Table

We surveyed 73 LP firms to get their views on the market. “This is the year the tortoise may gain on the hare.” State of the Market.

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What Everyone Should Take Away from Twitter’s 8% Staff Reductions

Both Sides of the Table

spoke at Michael Kim’s excellent annual Cendana VC/LP conference today. So what can we learn from this? None of these things.

The Experience of Being a Limited Partner in Venture Capital

This is going to be BIG.

You've decided to spread that across Z funds and you hope your portfolio meets some threshold. Rather than see LP interactions as a chore or a burden, new fund managers should see this as an opportunity to extend the community around their fund. Partnership investing is boring. For smaller funds, I think this is a real mistake.

If You Don’t Respect Your Customers You Won’t Be Successful

Both Sides of the Table

He was lamenting how much he hated LP meetings and how little he wanted to interact with LPs going forward. even once met with one very, very well known VC who told me, “I don’t attend LP meetings. The entrepreneurs in whom you invest don’t see the bird’s eye view of your portfolio or the industry more broadly.

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The Paradox of VC Value-Add

Feld Thoughts

We had a blast together and as we went out to raise our Foundry 2007 fund, Scott made several introductions which resulted in two wonderful, long term LP relationships. Scott Maxwell of OpenView Partners  had an awesome post up this morning titled  The Truth About VC Value-Add. Go read it – I’ll still be here when you get back.

How I Invest

Both Sides of the Table

I was speaking recently to the team at NuOrder , an LA-based company we’re an investor in about “realism in startups” — an impromptu talk I have given to any of our portfolio companies who ask. answered in the same way I always do so I thought I’d just write it publicly. “I fall in love.” fall in love with both the founders and the concept.

Why The SBIC Doesn’t Work For Venture Capital Anymore

Feld Thoughts

On paper, only one is in positive return territory as a fund, but the SBIC leverage is a substantial negative factor for the LP investors in that particular fund. And then you’ve got plenty of Boulder / Denver monsters on paper – some in our portfolio (like SendGrid and Sympoz) and others like Zayo, Ping, Logrhythm, and Datalogix.

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What We Are Seeing

A VC : Venture Capital and Technology

Almost every investment that comes our way these days causes us to ask ourselves "is this too close to xyz?" with xyz being one of our exisiting portfolio companies. Our portfolio companies have all been able to finance themselves when they have wanted to. It's a good thing. Entrepreneurship is in vogue. Makers are making.

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Why VC’s Don’t “Crossover” Invest

Agile VC

Why is this?  If Acme Ventures has a new supply of capital with fund IV, wouldn’t they want to reserve some of that for companies in Fund III?

LP 28

Announcing K9 Ventures II – A $40M technology-focused micro-VC fund

K9 Ventures

I am pleased to announce the formation of K9 Ventures II, L.P. K9 Ventures started  investing in 2009 with our first fund, K9 Ventures, L.P.,

LP 50

Announcing K9 Ventures II – A $40M technology-focused micro-VC fund

K9 Ventures

I am pleased to announce the formation of K9 Ventures II, L.P. K9 Ventures started  investing in 2009 with our first fund, K9 Ventures, L.P.,

LP 50

Advice to Grads: Join A Winning Startup (v. 2016)

Seeing Both Sides

Full disclosure: Flybridge portfolio companies are hyperlinked. If you have your own idea and no one can talk you out of it, that's awesome.

LP 45

Making Sense of the Stock Market Drops in Relation to Venture Financing

Both Sides of the Table

So with my portfolio out of whack I need to be cautious about not overly committing to venture funds so I scale back until my denominator is fixed.

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Some more data on Venture outcomes

Seth Levine's VC Adventure

The data I site below is from Foundry LP StepStone. Quick update here. And more importantly the data were financing level, not company level.

LP 31

Why being a VC is more difficult than people think

The Equity Kicker

Making consistent returns as a VC requires building a portfolio of companies in the difficult times that are ready to exit when the good times come. That necessitates raising capital when nobody wants to invest in venture and having the vision, discipline and patience to build value in a portfolio over time. NotGlamorous.

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How investors evaluate VCs

The Equity Kicker

Discipline also helps to keeps a venture fund’s loss ratio low which is important as they are ultimately stewards of LP investment funding.”

LP 22

Final Close: The Story Behind NextView's Own Fundraise ? AGILEVC

Agile VC

We recently completed the final close of NextView Ventures, LP and we’re excited about both our progress to date and our plans for the future. Our portfolio has grown to 15 companies today, the bulk of which is on the US East Coast and roughly half the companies have already progressed from the seed stage to completing Series A rounds.

One Weird Trick to Build a Personal Brand

Both Sides of the Table

And instantly I had people I had relationships with or even portfolio companies all asking me for intro’s to Jason. Jason M. First. Jason.

LP 92

An Inside Scoop on the Funding Environment and What it Might Mean for You

Both Sides of the Table

$30 million. That’s how much Invoca raised and we’re announcing it today. But the story started more than 6 months ago. FOMO was NOMO.

Announcing NextView Ventures II

Rob Go

For a seed stage venture capital firm, product/market fit comes down to two questions. 1) How is the portfolio performing? 2) Is your reputation in the market such that great people will want to work with you? On behalf of our team at NextView, I’m very pleased to announce that we have just closed our second fund.

The Singularity hits Venture Capital (Wilson/Kauffman Redux)

Fred Destin

Last week, we first got a new "bombshell" Kauffman report calling LP's out as being co-dependents for the terrible performance of VC, fundamentally complicit of the mess we are in (read Felix Salmon or watch Deirdre Bolton with Harold Bradley , Kauffman's CIO). The Mexican debt problem and the great LP awakening. Shocker ! It's hard.

Why Average VC Returns Don’t Really Matter

Agile VC

The VC industry (both the GP part and the LP part) pays attention to the sector’s returns, but the broader tech ecosystem only occasionally tunes in. And to be fair, the sector overall has done poorly in terms of returns in the last 10-12 years despite the fact that some funds (both established and new) have done very well.

LP 30

When Bad News Is Actually Good News

Babbling VC

For those of you not in the know, they are one of the largest limited partners ( LP's : investors in venture capital funds) in Europe and are basically in almost all the funds throughout the market. Hypothesis 3: Insufficient diversification in European VC managers’ portfolios    . Well, you've had a stabilization of the Tier 1 funds.

LP 23

Be Honest on VC Reference Calls

This is going to be BIG.

I'm very conscious of not demanding too much time from my founders with LP references, so I've asked a few of them at a time to join a group call. Either way, it becomes more obvious to the prospective LPs what's going on across the portfolio. The truth of the matter is that their experience with this VC hadn't lived up to the hype.

The Changing Structure of the VC Industry

Both Sides of the Table

There has been much discussion in the past few years of the changing structure of the venture capital industry. Where are we today? billion). Mbps).

The Authoritative Guide to Prorata Rights

Both Sides of the Table

It’s why I often advise angel investors to be careful about assuming that being an angel investor is a profitable exercise unless you have the ability to have a wide-enough portfolio to have a few companies doing extraordinarily well plus deep enough pockets to follow your winners. As always a balanced perspective is in order.

LP 94

It’s Morning in Venture Capital

Both Sides of the Table

Thomson Reuters data shows that around $10 billion of LP money went into VCs per year pre bubble. This article originally ran on PEHub.

Burnham's Beat: Virtual Stock Portfolio: March 2006

Burnham's Beat

Virtual Stock Portfolio: March 2006. The Burnhams Beat Virtual Stock portfolio was up modestly in March. The average pick in the portfolio was up 2.5% while the overall portfolio was up 1.7%. For the 1st Quarter overall, the portfolio was up 13.8% For the record, the virtual portfolio makes its final close up 109.3%

Burnham's Beat: Virtual Stock Portfolio: February 2006

Burnham's Beat

Virtual Stock Portfolio: February 2006. After a very strong January, the Burnhams Beat Virtual Stock portfolio was down slightly in February. The average pick in the portfolio was down 0.1% while the overall portfolio off 0.7%. Comments : Good first month in the portfolio thanks to a better than expected Q4 report.

Never Been Easier to Become a VC. Never Been Harder to Stay One.

Hunter Walker

Part of our presentation will be portfolio financials, which, because we’re relatively new, aren’t exceptionally volatile (LP speak: most of our investments are still carried at original value since no additional fundraising has occurred). high net worth individuals. family offices. other venture/private equity shops.

Burnham's Beat: Virtual Stock Portfolio: January 2006

Burnham's Beat

Virtual Stock Portfolio: January 2006. January marks the 2 year anniversary of the Burnhams Beat Virtual Stock Portfolio and as it happens the portfolio closed out its second full year on a high note, generating its second best monthly return ever at 12.8%. Virtual Stock Portfolio: January 2006. Burnhams Beat. About Bill.

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Dawn Capital Has Their Eyes On The Nordics

ArcticStartup

Or limitations set by LP's? And why does Dawn Capital exist today? H: We started by a microfund with Norman Fiore and myself back in 2006.

LP 6

Signs That You're No Longer a VC

Babbling VC

LP''s.what''s that? You stop writing blog posts which are actually targetted at your portfolio but aren''t. . It''s kind of funny that I''ve already been out of the VC game as a partner for almost two years and regularly still get referred to as one. It used to be hundreds, maybe even a thousand a year. You have more time at events!

LP 26