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Charting Form Ds to roughly see the state of venture capital “fund” raising

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Re: Charting Form Ds to roughly see the state of venture capital “fund” raising

#11

Post by nkingsy »

JCM9 wrote: post #5
TylerE wrote: post #4

Earlier quoted context omitted.

I think the real real giveaway is that like 90% there's a big exit, it's an aquihire and the "product" is quickly dumped.

Yep. Many / most aquihires are pretty ugly financially. While the headline sounds impressive (“X startup acquired for $250M”) the reality is that with preferred cap tables and terms most folks see nothing and investors are merely trying to recoup some losses or make a modest (less than S&P500 index fund return) return on investment. It’s basically a fire sale to salvage what’s left from the wreckage. Founders might g…

Don’t they usually get a better stock package than the average new hire?

Re: Charting Form Ds to roughly see the state of venture capital “fund” raising

#12

Post by barbazoo »

CalRobert wrote: post #9
JCM9 wrote: post #3

VCs were literally pitching to startups to take their money during the pandemic (there were several articles about that at the time). That nonsense will now come home to roost as companies that took money at those hyper-inflated valuations will now need to face reality. LPs that let their money get tied up in such nonsense are also about to head into a world of pain. I fear the present AI bubble will only exacerbate…

Geeze, I had a product with real users and a path to monetisation and I got ignored… is it because I was in Europe?

> and I got ignored

Socializing our losses here, aren’t we? If it works out you did it, if it doesn’t, it’s the others that didn’t see the value :)

Re: Charting Form Ds to roughly see the state of venture capital “fund” raising

#14

Post by dsr_ »

FirmwareBurner wrote: post #2

I think everyone knew, even without looking at any data, that startups were in a bubble thanks to Covid, when every "shoeshine boy" was studying to be a webdev at a start-up. Like how many food delivery apps that are actually profitable can the economy handle?

The problem is usually not "there are 300 food delivery services" but "there are three food delivery services and they control the market".

Re: Charting Form Ds to roughly see the state of venture capital “fund” raising

#15

Post by grogenaut »

JCM9 wrote: post #3

VCs were literally pitching to startups to take their money during the pandemic (there were several articles about that at the time). That nonsense will now come home to roost as companies that took money at those hyper-inflated valuations will now need to face reality. LPs that let their money get tied up in such nonsense are also about to head into a world of pain. I fear the present AI bubble will only exacerbate…

I had some VCs try and pitch me on joining a few companies as an advisor. When I didn't bite they pivoted to me just making a company. "What idea" I asked. "I'm sure you have some good ones, let us know." They said. "Money is cheap right now, ideas aren't".

I doubt they'd return my call today.

Re: Charting Form Ds to roughly see the state of venture capital “fund” raising

#16

Post by dadrian »

Most Fund I’s are going to be smaller funds, often $9.99MM to allow for a larger number of smaller LPs due to the $10MM threshold from the SEC. Whereas Fund II-IV are going to be considerably bigger, often hundreds of millions of dollars. So a large number of smaller funds falling off won’t make that big of a dent in the total dollars available, but may make it harder to get the smaller initial checks.

Re: Charting Form Ds to roughly see the state of venture capital “fund” raising

#17

Post by Havoc »

I'm in an adjacent space so quite interesting to me. Couple of concerns:

1) This Fund+Roman Numeral notation is universal among funds. Meaning this data isn't VC. It's use of fund structures. Real estate, PE, private credit maybe bit of hedge funds etc...and yes also VC.

2) Filling trends are affected by jurisdiction fashions so to speak. One of the big fund jurisdiction makes a small rule tweak and everything pivots there. Or away. The funds we're setting up today are structured differently and in different jurisdictions than 2 years ago. Same for regional focus. Think about what that does to a single jurisdiction trend analysis like this.

3) The spike coincides pretty neatly with covid, lockdown and that sudden injection of cash trillions into the financial system. So a spike in fund entities registered makes sense. Haven't looked at who got those trillions, but I'd wager it was bigger institutions not young VC operations starting their first fund.

Still the core hypothesis seems sound for funds overall. Regardless of type a lot of these funds will indeed be on a 2-4 year investment period. So it does broadly check out that there might be a softening of funding supply coming up.

Re: Charting Form Ds to roughly see the state of venture capital “fund” raising

#19

Post by cantor_S_drug »

grogenaut wrote: post #15
JCM9 wrote: post #3

VCs were literally pitching to startups to take their money during the pandemic (there were several articles about that at the time). That nonsense will now come home to roost as companies that took money at those hyper-inflated valuations will now need to face reality. LPs that let their money get tied up in such nonsense are also about to head into a world of pain. I fear the present AI bubble will only exacerbate…

I had some VCs try and pitch me on joining a few companies as an advisor. When I didn't bite they pivoted to me just making a company. "What idea" I asked. "I'm sure you have some good ones, let us know." They said. "Money is cheap right now, ideas aren't". I doubt they'd return my call today.

Money was so cheap then, I remember a VC fund which would match ideas to founders and get them to success because of how versatile and multifaceted the VC team was. :D

Re: Charting Form Ds to roughly see the state of venture capital “fund” raising

#20

Post by kerblang »

Bubbles are largely a function of finance, not tech; if there is a lot of easy money available, it wants somewhere to go, and any tech will do (recall XML startups...).

Interest rates are one of the biggest factors, because of how they create indirect pressure on cash availability (which is the whole point of raising interest rates).

Everyone is bracing for tariff recession as well, which may cause a lot of investment capital flight.

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