Kevin Gayhardt

Summary: This article discusses various venture capital news, including insights and analysis of VC firms, trends in investments, and the impact of technology on the industry. Key takeaways: The article mentions that Insight Partners is potentially raising over $10 billion for its 13th fund, and OpenAI may be altering its complex corporate structure. There is a growing trend of Silicon Valley companies following China's lead and a discussion of how VC Mike Moritz believes the pace of work in tech companies should be "furious." Y Combinator is expanding the number of cohorts it runs, a new decentralized music streaming service called Tune.FM is introduced, and there is discussion about startups working on addressing climate change. Counter arguments: There may be concerns about the potential drawbacks of following China's lead, and the idea of a "furious" pace of work may raise questions about work-life balance and company culture. Some may argue that expanding the number of cohorts may lead to a decrease in the quality or effectiveness of Y Combinator's program. The article does not mention potential challenges or limitations facing the new decentralized music streaming service or startups working on climate change solutions. #venture #venturecapital #vc

11

It’s BOD & AGM season. After 9 BOD meetings and 7 AGMs there is a common theme. “Generally” Emerging Fund 1&2 managers w/o firm building experience; and Founders/ELTs who raised pre-seed generalist and family office party rounds at Seed or crossover/hedge fund capital at Series A. Same general dynamic… experience matters. #venturecapital #emergingmanagers #startups #familyoffices #lps

40

6 Comments

Congratulations to our friends at $150 billion+ AUM private markets multi-strategy fund manager StepStone Group on closing on $3.3 billion for its sixth venture capital secondaries fund, far surpassing its target of $2.6 billion. It is the largest VC #secondaries fund raised to date, eclipsing the $1.45 billion that Industry Ventures raised for 10th venture secondaries fund last September. The 2021 acquisition of Baltimore-based venture capital #specialist Greenspring Associates has been a brilliant, complementary and highly successful partnership for both firms. And yes, I really like the fact that Greenspring Associates originated and still has a strong base in the #baltimore area. While GP-led secondaries have been far more common in private equity, it is noteworthy that the firm sees a more balanced set of investments across LP-led, GP-led and direct secondaries deals than its predecessor venture secondaries funds. The limited partner list is also remarkable: #Taiwan-based FUBON LIFE INSURANCE CO., LTD. committed $70 million, UK-based Border To Coast Pensions Partnership committed £45.7 million and the NSIA: Nigeria Sovereign Investment Authority and Montgomery County Public Schools Pension Fund both invested undisclosed amounts. Yes, #Nigeria has a sovereign wealth fund investing in alternative assets, private markets and venture capital secondaries - amazing! Prior fund limited partners included the Community Foundation of Greater Memphis, #Finland’s LUT University, the Memorial Hermann Health System, Mercy Health Foundation, @New Zealand Superannuation Fund (NZ Super Fund), #Oklahoma Police Pension and Retirement System, Samford University, School Employees Retirement System of #Ohio and State of Wyoming Treasury. I am sure many of them re-upped and even increased commitment sizing. A world-class list of global limited partners across allocator categories. Well done StepStone Group and see you again somewhere in the world sometime soon! #fundraising #alternativeassets #privatemarkets #venturecapital #capitalmarkets #sovereignwealthfunds #insurancecompanies #pensionfunds #hospitalsystems #superannuation #endowments #foundations https://lnkd.in/gUdJXRw3

80

3 Comments

For the past year (and then some), I’ve been working closely with my Partner Will Rayner to build and launch something that we’re super excited to now make public - Lookout Ventures: a new seed stage fund, backing infrastructure and B2B software startups outside of Silicon Valley. We’re building on almost a decade spent sourcing and leading deals at TDF Ventures. While there, we saw the majority of the VC industry chasing and bidding up the same set of SaaS deals - based in a few select ecosystems like the Bay Area - and demonstrating the same set of well established go to market benchmarks. We’re not here for those deals. What we are looking for: *Regions*: The days of needing to be in Silicon Valley to succeed are over. Startup culture has spread to many metropolitan areas from Raleigh-Durham to Washington DC to Houston to Chicago. Those cities have a combination of great universities, major corporate headquarters, and local accelerators and incubators, which are the key ingredients for startup creation. We’re particularly focused on the Southeast, Midwest and Texas. *Stage*: Founders are probably sick of big brand investors telling them that their traction is too early but they’d love to stay in touch for the next round. While Lookout won’t often invest pre-revenue, we do invest before product market fit. Whether it’s called a seed, seed prime, or early A, we want to work with founders as soon as they know they have a solution ready to scale. *Sectors*: We’re comfortable investing early because we’re staying focused on topic areas in which we’ve built our expertise and networks during our past decade of investments around infrastructure software and vertical SaaS. Within those areas, we have more specialized interests ranging from MSP (managed service provider) tooling to cybersecurity serving the small business to SaaS focused on field workers in various verticals. We’re actively writing checks and are excited to already be working with great teams from Arpio, hotglue, inforcer, and CloudCapsule. If you’re building or investing in these areas, drop me a line and let’s catch up.

348

65 Comments

Can't wait to reconnect with the brilliant Amanda Herson and join the discussion with Maciek Gnutek and Iain Martin at Slush about our fund models and what they mean for Founders ❄ 🚀

17

After a whirlwind two decades of a corporate career – which has spanned a traditional management consulting firm, a Fortune 500 toy company, a world class entertainment agency, and a growth equity fund, I’m excited to officially share that I’m striking out on my own with Shruti Sehgal. Together, we’re proud to launch The Moonshot Company – a new kind of strategic consultancy, representing high-growth talent, brands, and investors looking to accelerate their cultural and commercial success from a place of authenticity, creativity, and intent. The Moonshot Company will specialize in integrated brand and growth strategies–culled from our prior executive careers in consumer, entertainment, media, finance, politics, and PR. Throughout my professional life, I often found myself at the center of consumer industries undergoing a major landscape shift. Shifting consumer behavior, the proliferation of social media, digitally-native consumption, and revamped business models have underpinned every business I have been fortunate to be a part of. Winter has always been coming. And it is through that lens that I learned a lot about myself as an executive. My curiosity has always found that change exhilarating - and I am particularly adept at spotting through lines and opportunity amidst a constant state of flux. Rapidly transforming industries don’t scare me, stagnation does. And yet, I have always felt a natural tension between building these industry-specific skills and the freedom to add my own interdisciplinary instincts and perspectives to bear, especially on someone else’s platform. But as the world has changed, so have I: this very tension I once thought frustrating is now a reason for being.  If I could go back in time, I would tell my younger self that my own diverse range of experiences and multicultural consumer lens always has been, and will always be, as instructive to my success and growth as anything else. The future of business and culture requires differentiated voices and leaders who can bring a much wider set of skills and a unique blend of deeply-lived experiences – both personal and professional – to achieve transformational outcomes for clients, and this is the foundational vision of The Moonshot Company. Simply put: this platform didn't exist, so we built it. As mothers, former senior executives, culture-obsessed consumers, and South Asian women – Shruti and I are thrilled to put our skills, networks, and novel strategies to work for clients who share our values, and whom we feel uniquely compelled to deliver Moonshot-level results for. If our vision and founder story resonates with you, please reach out. And as we embark on this new journey, I’d love to hear more about your own Moonshot below. 🚀 💫

213

46 Comments

Summary: The article discusses the current challenges faced by VC firms in attracting new capital, but highlights how established firms like Kleiner Perkins are still able to raise large funds. It also touches on the potential impact of AI on investment strategies. Key takeaways: Many VC firms are struggling to secure new capital in a tepid IPO environment. Established, brand-name firms like Kleiner Perkins are still able to raise significant funds. AI is emerging as a potential game-changer in the investment landscape. Counter arguments: It may be premature to attribute Kleiner Perkins' fundraising success solely to AI; other factors could also be at play. The article may overlook smaller VC firms that are also finding success in fundraising. #venturecapital #vc #venture #startups #artificialintelligence

5

Is Now the Best Time to Raise a Private Equity Fund? According to industry leaders, it just might be. "I’m much more optimistic at this point in the cycle in 2024 than I was in 2023 and 2022," says Andy Lund, global co-head of Houlihan Lokey's Private Funds Group. Despite expectations of a slowdown, the first half of 2024 has been unexpectedly successful for PE managers raising capital. U.S.-based funds closed on $155 billion by the end of June, slightly ahead of the first half of 2023 (PitchBook Q2 2024 US PE Breakdown). Alex Russ, head of North America for Evercore's Private Funds Group, sees this as an ideal moment for GPs with open funds. "We saw fewer new fundraise launches in 2024 than in 2022 and 2023, leading to a slight easing, which we expect to continue into the second half of this year," he notes. However, challenges remain. LP capital is still largely locked until M&A and exit activities resume. Evercore anticipates flat PE fundraising figures for 2024 compared to 2023. Moreover, other asset classes are vying for already limited institutional capital, with private credit showing particularly strong growth. In this context, Maria Konnikova’s "The Biggest Bluff" offers an insightful analogy. Inspired by "Theory of Games and Economic Behavior" by John von Neumann and Oskar Morgenstern, the book explores von Neumann's belief that poker epitomizes the delicate balance between skill and chance that governs life. Doing well at poker isn’t just about playing well; it’s about playing well relative to everyone else. And even with the best strategies, luck plays a critical role. As Nobel-winning economist Daniel Kahneman notes, "The successful funds in any given year are mostly lucky; they have a good roll of the dice. There is general agreement among researchers that nearly all stock pickers, whether they know it or not—and few of them do—are playing a game of chance." The last two years were like drawing a bad hand in poker for those raising funds. The book also emphasizes the importance of thinking like a Strategist—something I’ve honed throughout my career. Each move requires reassessment based on new information. You need a plan that evolves with feedback and supports long-term, good decision-making. If you’ve lost your chips, was it due to an unlucky situation—or because your strategy was flawed? A recurring mantra of Poker Hall of Famer Erik Seidel is "less certainty, more inquiry." If that becomes your guiding principle, not only will you actively listen, but you will also adapt and grow. For GPs, strengthening relationships with existing LPs is more crucial than ever. Now is the time to leverage your learnings and craft compelling narratives that showcase your commitment to value creation and strategic growth. By highlighting your firm's ability to navigate complex market dynamics, you can strengthen LP alignment and foster the partnerships needed for long-term success.

59

4 Comments

Very interesting to see the National Football League (NFL) hired our friends at leading global investment bank PJT Partners to serve as a liaison between the league and private equity firms interested in buying stakes in teams, as a step towards attracting institutional capital which can further increase deal flow and valuations. The average NFL team is worth $5.14 billion, according to Sportico, by far the highest of any U.S. league. To buy the hypothetical average team under current league rules, a buyer would need at least $1.54 billion in cash, could add $1.2 billion in debt, and would still need to fund the other $2.4 billion from themselves or a set number of individuals who often get little of tangible value for their minority stakes. As franchise valuations continue to rise, that becomes a harder and harder financial proposition. Expanding the pool of potential buyers for minority stakes would likely increase valuations across the league. In addition to the ban on institutional money, the National Football League (NFL)’s ownership rules include a $1.2 billion debt limit for new buyers, a limit to how many minority owners a team can have, and a set amount that a team’s lead owner can hold (30% for incoming buyers). A new committee has been formed to discuss the loosening of some of those rules to make room for institutional investors ie private markets fund managers. Will the National Football League (NFL) partner with a private markets fund manager to establish a stakes platform similar to what the National Basketball Association (NBA) has established with Blue Owl Capital? I love the business of sports and I am very interested to see next steps here. #alternativeinvestments #sportsbusiness #privatemarkets #nfl #capitalmarkets #institutionalinvestors #fundmanagers #privateequity #sports

77

1 Comment

Co-Heads of Equity, Matt Nord and David Sambur, spoke to Bloomberg about how Apollo’s disciplined private equity strategy has fueled recent dealmaking and strong return of capital. Read more about our approach to sourcing and building stronger businesses: https://lnkd.in/gUwf5qze

63

The last several years have witnessed a significant increase in the use of continuation funds as the capital markets dried up. Now, per PitchBook, there has been a meaningful uptick in exits from those funds. Per the article: "Continuation funds have roughly doubled their quarterly exit activity, enduring as a viable liquidity solution for PE firms." Any uptick in liquidity activity is a hopeful sign that a recovery is underway. While the Pitchbook article specifically addressed activity in private equity, hopefully we will begin to see signs in the Venture space as well. Endeavor Colorado #privateequity #venturecapital #innovation #investing #founders #startups #entrepreneurship https://lnkd.in/gRW6WPNm

7

Great analysis of recent #vc trends. Thank you Kaela Roeder and Technical.ly for including my thoughts in the piece. My "expanded" two cents below for anyone curious... It is easy to get excited by what is happening in venture capital these days given the advent of AI. However, for early-stage startups, the numbers tell a more nuanced story. Early-stage deal volume in Q4-2023 was down 66% from the peak (Q4-2021) and a quarter of the deals were down rounds. In 2024, volumes stayed fairly flat relative to 2023 levels (signalizing a normalization to pre-pandemic VC activity) and 32% of deals were down rounds in Q1 (a worsening since year end). Early-stage valuations have spiked back up this year – a pleasant boon for some founders. But, this inflation is largely driven by the excitement around AI and strong demand for capital-efficient, high-growth companies. Many startups have tried to become “dot AI” businesses overnight; however, such tactics are not the “silver bullet” to fundraising challenges and growth. With limited time and capital, funds are on the hunt for companies with bulletproof fundamentals or those with exponential growth potential. If you don’t check one of these two boxes, the VC world looks fundamentally different for you. Locally, there are some positive tailwinds. The D.C. area has outpaced other metro areas in adding AI jobs due in large part to the defense industry and an increasing number of tech companies opening-up federal outposts. Over the long-term, this will be very positive for D.C. startup growth and talent.

29

2 Comments

Elizabeth Cook, Managing Partner of VC firm AI Capital, addresses the art of the [VC] deal: An intricate blend of relationship building, offering a succinct and concise value proposition, domain expertise, and of course, profit! #venturecapital #vc #ai #artificialintelligence #enterpriseai #startups #entrepreneurship #investing #alternativeinvestments #familyoffice #pensions #foundations #endowments

19

I posted last week about the shift in sentiment from LP's regarding secondaries. It used to be that GP's were told to hold their winners forever but more recently a lot of LP's are recommending pre-seed & seed stage VC's get good at navigating secondary transactions as early as Series B rounds. Obviously a lot of factors go into these decisions such as where you are in the life of the fund, how the rest of the portfolio is performing and the performance of the underlying company in question. But in this new reality, entry price and ownership relative to fund size really matter in order to still generate top decile funds by selling into later stage rounds; and that tends to be at odds with many seed fund strategies I see out there today. According to Carta, the average seed round valuation is $15M and I see some seed funds doing seed deals at $20M - $30M valuations. Many seed funds between $40M - $75M in size (avg of $50M) write seed checks at $15M valuations and probably invest $1.5M into each company to get 10%. The portfolio construction in this scenario is probably 20-25 companies given the check size. Assuming 50% dilution (probably low), you need a company to get to a $1B valuation to return your fund and you have less shots on goal to do that at a time where I think the probability of hitting a winner at seed for any single seed fund is going to go down per my post last week. It also means the opportunities to sell secondaries in later rounds in order to drive meaningful DPI is harder because it likely won't get to that sort of valuation until Series C or later; and you probably don't want to consider selling until the position is worth even more than your entire fund. Alternatively, if you write a $1M check into a deal at a $8M valuation out of a $50M fund, you are getting 12.5% ownership and probably investing in more like 30-35 companies given the initial check size. Higher ownership and more shots on goal. Assuming 50% dilution again, you get there with a $800M valuation. At even lower valuations, $1B outcomes would return multiples on the fund and it really opens up the options when it comes to selling in secondaries in order to manufacture liquidity. Given the current dynamics in the market, I wonder if more funds will start to focus on sub $10M valuation rounds.

46

The new quarterly review is live! Each quarter, I dive into the latest trends and shifts in the venture capital market, covering both the broader macro perspective and the unique insights we’re seeing at Florida Funders. Check out my latest article to stay informed on what’s shaping the VC landscape and how we're navigating it at FF. Always eager to hear your thoughts – let’s keep the conversation going! #VentureCapital #FloridaFunders #MarketInsights

23

1 Comment

Fund manager GP stake investments are one of the most active strategies in private markets with limited partners across the globe committing to GP stakes funds, and fund managers selling stakes to such fund managers, with almost every manager of decent quality entertaining such discussions. As long-standing GP stake and seeding investors, we have experienced several pros and cons which we can discuss later, but this is great data shared by Ed Stubbings and created by leading private capital markets advisor Houlihan Lokey listing GP stakes deals over the past 1 year. More deals to come and I would look forward to catching up with Houlihan Lokey on the market. Thank you for the insights! #gpstakes #alternativeassets #fundmanagers #capitalmarkets #data #fundmanagers #privatemarkets #privateequity #limitedpartners

38

2 Comments

Southeast VC Update: Q2 2024 PitchBook Venture Monitor Highlights The Southeast continues to hold its position in the VC regional landscape #5 in dollars raised for Q2 2024 🥉 #3 in deal count (just behind the West Coast and the Mid-Atlantic) H1 2024 Southeast Breakdown:  📊 10% more deals than Northeast  📈 30% more deals than Mountain region, 20% more than South  💰 5% more dollars raised than Mountain region  💸 23.5% more dollars raised than South YoY Funding Trends:  📈 Southeast: Up 29% 📈 Mid-Atlantic: Up 136%  📉 Midwest: Down 67%  📉 New England: Down 11%  📈 West Coast: Up 59% Key Trend: While closing in on Mid-Atlantic numbers, we are seeing more deals but smaller rounds. This could indicate strong activity occurring in the seed & early-stage funding, despite the macro challenges. (Pitchbook classifies the Southeast as AL, FL, GA, KY, MS, NC, SC, TN, Puerto Rico, & Virgin Islands) #BuildInSE

20

What's the latest in #MiamiTech? We've got the low-down from an investor's perspective. Founders: take note! Many thanks to Alpaca VC's David Goldberg, and to Lorraine Sanders and Nancy Dahlberg Refresh Miami for making it happen. https://lnkd.in/daXmV6Zf #investing #VC #fundraising

24

1 Comment