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Tag: #VCFunds

The Tortoise and the Huh???

The Tortoise and the Huh???

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How often have we heard that slow and steady wins the race? We’ve been looking at funding reports lately and there’s no doubt that this has been a banner year for both funding – and exits. Win-win for both sides of the table, and all the better when seemingly everyone wins, what, eh? Or do they? And funding, in some cases, seems to be happening at incredible speeds.

 

According to Pitch Book, Venture capital rewrites the record books, with “Venture-backed companies having attracted $150 billion in 2021, more than 90% of last year’s record total…IPOs and SPACs helped to drive the exit value of venture-backed companies to $372.2 billion in the first half of 2021. That was 30% higher than 2020’s all-time record…Firm-level fundraising also (took off), with investors closing funds worth $74.1 billion, about 91.5% of 2020’s record-breaking amount.  And Deals, exits, funds—US VC’s records for value are going to get even bigger Read More...

Investors in the Hot Seat

Investors in the Hot Seat

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Image by mohamed Hassan from Pixabay

We work with and/or coach entrepreneurs all the time, and recently realized that many founders have no idea how the VC model works, meaning how and why VCs deploy funds – and make decisions – the way they do. So we’re going to shift the perspective to help you to better understand the process.

You go to investors because you need capital in order to get your company to the next level. Time to think about VC firms as companies as well, because they are. Some of them are large companies, re have a bigger war chest of funds to deploy, but truth be told, the majority are more akin to SMBs. Where does the money come from for the funds? Family offices, high net worth individuals, strategics (eg companies/corporations aligned with the investment vertical or thesis of the fund) or institutional investors (pension funds, university endowment funds, sovereign wealth funds, etc), and the funds manage their investments. The fund’s investors invest in specific funds for various reasons: the expertise of the team, the fund’s track record, their spidey sense, alignment of focus, etc.

Like the VCs who invest in your company, those LPs expect a return on their investments. If the fund fails to do that, well, they’re going to have a harder time attracting investors themselves when they go to raise their next fund, or to put it into startup terms, their Series A, B, whatever. Read More...