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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

#51

Post by makestuff »

ajhit406 wrote: post #43

i'm an early-stage vc - the author's analysis on "number of funds" (specifically VC funds) is accurate. the overall volume of venture allocation has also slowed considerably if not decreased (which is totally expected in a higher interest rate environment). 2021-2022 was a total blip on the screen zero interest rate era thing. i'm not seeing considerable slowing of new startup development, quite the opposite actually…

With so much money flowing into the massive funds, do you think more and more unicorn startups will just stay private? It seems like there are liquidity opportunities for employees/founders via tender offers, secondaries, etc.

If you are a profitable unicorn who can raise money in the private markets when needed, is there really a benefit to going public? Maybe I am missing something, but going public doesn't really seem to be as important as it used to be.

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

#52

Post by AlienRobot »

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 is cheap right now, ideas aren't"

Decades of programmers scoffing at the "idea man" with his new app idea and now this...

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

#53

Post by monero-xmr »

TuringNYC wrote: post #50
monero-xmr wrote: post #48

Earlier quoted context omitted.

Not many successful vibe coded products

People dont really state their product has been vibe coded. Also % vibe coded is a spectrum. I feel pretty confident in saying I could knock out a PoC in a day now by virtue of code assist. It still requires work, but not VC $.

Not many products built in a day have any value

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

#54

Post by vonneumannstan »

dadrian wrote: post #16

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.

What could a fund like this even write checks for? Even the most basic SaaS companies are getting multiple of the entire fund as seed or pre-seed...

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

#55

Post by indoordin0saur »

kerblang wrote: post #20

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 investmen…

I wanted to know what an "XML startup" was so I googled the term and the first result that seems relevant was actually this exact comment lol. I guess this is a phrase of your own invention?

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

#56

Post by pringularity »

(I don't think this would change the overall message of the analysis), but one reason why the "Fund I" bump might be so pronounced compared to other reports is because of the "SPV as a service" data that was hinted at in the takeaways.

It's very common for these single-asset SPVs to be titled, "[Abbreviation] Fund I" -- but these aren't really the same type of "Fund I" as a multi-security venture fund run by a professional manager.

E.g.: (1) These are entities that are sort of arbitrarily titled "Fund I" as part of a template naming convention, but there's not as much of a direct expectation that they'll have a corresponding Fund II, III, etc. (2) Whether they do is more of a function of the underlying portfolio company raising a subsequent financing and giving the same SPV manager an allocation (which small time SPV managers often don't get pro rata for), rather than the fund manager's ability to raise a subsequent blind pool fund II.

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

#57

Post by dang »

Oof that title. Particularly when the site design is so substantive!

I've edited it to use what I think is representative language from the article itself. (This is to allow it to spend more time on HN's frontpage, because the article itself deserves it.)

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

#58

Post by throwaway31131 »

indoordin0saur wrote: post #55
kerblang wrote: post #20

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 investmen…

I wanted to know what an "XML startup" was so I googled the term and the first result that seems relevant was actually this exact comment lol. I guess this is a phrase of your own invention?

That seemed amazing to me because it would’ve meant Google found the comment, integrated it into thier index, and then made that index available, all within three hours. I know Google is good but are they that good?

I googled “xml startup business example” their AI summarized an “xml startup” as “a business using XML as a core technology” and gave the business below as an example startup.

https://databridgesolutions.io/

I didn’t see any reference to the hacker news comment.

Most of the links google provided below the AI summary were about how to configure various XML tools to… startup. Standard link farm stuff. :)

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

#59

Post by JumpCrisscross »

Havoc wrote: post #17

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…

I am in this space. Most funds don’t have “fund” in the name. (And VCs have, anecdotally, tended to use Arabic over Roman numerals, the latter being the domain of PE and RE.) Also, there is multiple counting with this method because you will have collections of GPs, funds, SPVs, co-invests, feeders, et cetera, all with the same fund + [Roman numeral] format.

What you may be measuring is the formation of naïve funds. And yes, anecdotally, we saw a lot of novice managers emerge in '21 and '22. (Many of whom are now winding down.) But that doesn't mean they're concentrated in VC. In my experience, RE and--novelly--crypto, lead the charge.

If you want to prosecute this question, better data will be found in Pitchbook and the VCFA.

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

#60

Post by ghc »

vonneumannstan wrote: post #54
dadrian wrote: post #16

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.

What could a fund like this even write checks for? Even the most basic SaaS companies are getting multiple of the entire fund as seed or pre-seed...

Typically $250K-500K checks as a follow on. From what I'm seeing, lots of companies are still out there raising sub-$3M pre-seeds and sub-$10M seed rounds. You might only get 1-2% of the company but you can always try to buy up in later rounds through an SPV or your next fund, which can be a marketing strategy for raising fund 2.
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