Trending Sources

Why the LP Outlook is Good for Venture and Startups in 2017–2020

Both Sides of the Table

I know most startups (or even VCs) tend not to think about this but when you ask LPs the data are clear: Another trend we’ve noticed in LP opinions is regarding seed funds.

LP 75

Kindred Spirits – Our Investment In Founder Collective

Feld Thoughts

We also know many of the entrepreneurs in their portfolio. If you look at the Founder Collective portfolio , you’ll see many well-recognized companies that they invested in at the very first round. FC’s portfolio is made up exclusively of seed stage investments at seed valuations.

How Do VCs Mitigate Risk In Their Investment Portfolios?

Ask The VC

Question: How do VCs mitigate risk in their investment portfolios? 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. The primary ways VCs mitigate risk are (1) time diversification, (2) stage diversification, (3), sector diversification, (4) pro-rata or over pro-rata investing over time, and (5) number of investments in the portfolio.

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. Community : Building out Homebrew WW HQ in SF which at any time houses a couple of portfolio companies and founders pre-funding.

LP 36

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. And what leads to adding or removing a fund from Irvine’s portfolio? An addition to the portfolio typically offers some differentiation or new value proposition.

LP 37

Where Does VC Money Actually Come From? [Flowchart]

View from Seed

The nature of LP investors can vary widely, but the bulk of the capital in the VC ecosystem comes from large institutions like pension funds, endowments of universities and hospitals, charitable foundations, insurance companies, very wealthy families (aka family offices), and corporations.

LP 155

Where Do Venture Capital Dollars Actually Come From? This Visual Explains

Agile VC

The nature of LP investors can vary widely, but the bulk of the capital in the VC ecosystem comes from large institutions like pension funds, endowments of universities and hospitals, charitable foundations, insurance companies, very wealthy families (aka family offices), and corporations.

What Do LPs Think of the Venture Capital Markets for 2016?

Both Sides of the Table

While I’m not an LP, the following post represents my discussions with more than 100 LP firms – specifically ones that do fund VCs – and full survey data from 73 firms , so I’ve tried to capture the essence of what I’ve learned.

Kernel column: The LP update meeting

The Equity Kicker

The LP Update Meeting. These meetings are the equivalent of board meetings for our portfolio companies. We have around a dozen LP update meetings a year across our four funds and they are the most important moments of contact we have with our investors. My hope is that the following description of the meeting will help explain the information we request from startups and the pressures we sometimes find ourselves under which we then have to pass on to our portfolio companies.

Why Successful People Focus on the Bottom End of the Funnel

Both Sides of the Table

I’ve met many VCs who take fund raising meetings with lots of LPs but struggle to get traction and I believe often the problem is that first meetings are easy but the 28 steps to get each LP to closure take an insane amount of focus, effort, follow through and discipline.

LP 155

Embracing Your Community as a Strategy

Both Sides of the Table

We did what many VC funds did – we presented our annual results, we stood up and talked about our portfolio companies, we invited a few to also present and then we had dinner & drinks at some posh restaurant. To the LP who so ardently doubted me.

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

Both Sides of the Table

” There are a lot of data points that one can observer to get a sense of the venture capital markets – both LP fundings into venture and VC financings of startups. We surveyed 73 LP firms to get their views on the market.

LP 94

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

Both Sides of the Table

I spoke at Michael Kim’s excellent annual Cendana VC/LP conference today. Today I called it, “our own little VC led, portfolio-by-portfolio company version of RIP Good Times from 7 years ago.”

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. That happens most when the LPs represent a diverse group of industries and perspectives who want to be helpful to portfolio companies and founders. Partnership investing is boring.

Podcast Saturday – Meet Lindel Eakman

Feld Thoughts

Question from Michael Kim @ Cendana: How is Lindel approaching portfolio construction for Foundry Next? What combination of GP portfolio & direct exposure diversifies the portfolio while retaining upside through individual deal performance? Does Lindel agree with Chris Douvos in stating this could lead to the ‘hybridisation of GP and LP’? What are the biggest problems with the LP community today?

LP 11

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. I even once met with one very, very well known VC who told me, “I don’t attend LP meetings. Who else can provide context if your portfolio isn’t growing as quickly as your peer group, if they believe you paid too high a price on a deal, if they question your due diligence in a given situation or whatever critique they might offer?

LP 109

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’s post is a great history lesson about the evolution of “value-added VC” behavior, especially around organization building by VC firms to “add more value” to their portfolio companies.

What We Are Seeing

A VC : Venture Capital and Technology

" with xyz being one of our exisiting portfolio companies. The one bright sign in LP land is that emerging managers (what USV was a few years ago) are getting more attention from LPs. Our portfolio companies have all been able to finance themselves when they have wanted to. That's a good reason to take money from a firm that stands behind its portfolio companies. The Wall Street Journal has a story out today that says " Web Startups Hit Cash Crunch."

LP 114

Why VC’s Don’t “Crossover” Invest

Agile VC

Unlike a startup that might raise equity financing across several rounds all combined in a single balance sheet, VC’s do not simply commingle these funds into a single bucket to be allocated across all the companies in that firm’s portfolio.

LP 36

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. I was asked again in an LP meeting later in the week and then again at a founder breakfast gathering we hosted yesterday.

Some more data on Venture outcomes

Seth Levine's VC Adventure

The data I site below is from Foundry LP StepStone. This was an internal analysis by an LP so I’m not able to release the full report but the data set represented over 3,000 companies and more than $ 20Bn in invested capital and spanning years 1971 through 2012. Quick update here.

LP 39

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., – A $40M technology-focused micro-VC fund.

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., – A $40M technology-focused micro-VC fund.

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. As a partner in one of the most visible VC firms in Colorado and an LP in many of the Colorado VC firms, I’ve never heard from Matthew or anyone from the SBIC. I woke up to an article in Daily Camera today titled Small Business Administration trying to bring SBIC funds to Colorado.

SBIC 51

Seed Investing & Dark Dealflow: You Lose 100% Of The Deals You Don’t See

Hunter Walker

New Areas of Interest That Our Portfolio Doesn’t Yet Represent – SaaS, Marketplaces, Commerce, Autonomous Robotics, Financial Services/FinTech. These are some of the verticals that our portfolio suggests we have interest and a POV.

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

Both Sides of the Table

When many venture investors are seeing their personal public portfolios tank it creeps into their business lives and creates an emotion that is less risk tolerant whether they’re aware of it or not.

Stock 142

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

Seeing Both Sides

Full disclosure: Flybridge portfolio companies are hyperlinked. Around this time of year, many students are focused on finding a job in Startup Land and building their careers. If you have your own idea and no one can talk you out of it, that's awesome.

LP 42

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. Just under half our portfolio is B2B in nature, slightly more than half is consumer-facing in some way.

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. And was fortunate enough to get a reference call from an LP asking me this very question.

LP 93

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. 7/ Net/Net: VC is a hard f **g business but simplification in press makes it seem glamorous & easy – almost swashbuckling. NotGlamorous.

LP 30

Qualities of an Awesome Investor

Dshen

Bringing it back to my chats at Launch Capital, I then brainstormed a list of qualities which I think make for an awesome investor and what would make an LP want to invest in. Here they are below: Track record, increasing IRR, value of startups in portfolio to date. Ability to clearly communicate what they are looking for in a deal (knowing that this is individual and everybody will have their own thing - uniqueness here would probably be valuable to an LP more than startup).

LP 19

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. 2) No Synthetic Alternative – If an LP can’t “buy” VC as an index, could they replicate the returns of an index some other way?

LP 33

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. Additionally, once the funds themselves have significant capital, they will double-down on the good deals in their portfolio and put more money to work. Hypothesis 3: Insufficient diversification in European VC managers’ portfolios .

LP 23

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. As far as I can see, there was limited collective thinking amongst LP's in terms of making sure that the startup market did not end up flooded with money.

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. A friend of mine running a very successful company found himself conflicted over an upcoming reference call. It was from a top college endowment that was taking a look at the next fund of a widely known VC who had backed him.

Happy Birthday, RTP Ventures

Passionate Intensity

It’s been an amazing year, a whirlwind that seemingly parallels the experiences I’ve had at startups I’ve built — setting up basic operations, assembling a team, trying and testing business models and actually putting together a respectable portfolio of investments.

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

Both Sides of the Table

They either had a portfolio company in market and weren’t getting offers as quickly as expected or they knew a friend in the biz who was recounting this to them in a session VCs strangely call “comparing notes.”. $30 million.

Announcing NextView Ventures II

Rob Go

1) How is the portfolio performing? On performance, we are happy with how things are shaping up in our early NextView I portfolio. As a result, we have been able to return a nice chunk of the first fund, with many of our most promising portfolio companies still in play and progressing rapidly. We are still very small in the scope of venture capital firms, and we think that allows us to have a favorable balance of fund size to potential ownership in our portfolio companies.

The Changing Structure of the VC Industry

Both Sides of the Table

At the other end of the spectrum large funds have gotten even larger in the past few years which has massively increased the amount of consolidation in our industry as 66% of LP money into venture is now concentrated in late-stage or full-cycle VCs.

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. By 2000 the total LP commitments had mushroomed to more than $100 billion. LP contributions to VC firms shrunk from 2000 and by 2005-2008 had stabilized to around $30 billion per year.