Michael Sidgmore

What Dave McClure is building resonates well what we are doing with our Siena Secondary Fund. Although one focuses on fund stakes and the other company positions, the journey is the same - need to educate the market about what is #VC #secondary and how to benefit from it...

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Dan Primack had some pointed criticism for #VC yesterday in his Axios Pro Rata newsletter (a daily must read IMO 😤). In short, the model doesn't work if it can't produce exits for LPs. Don't blame public markets (which are at all-time highs) for the lack of liquidity either. 📈 💸 Instead, this is a "liquidity drought of your making" where "...swinging for the fences on every pitch, rather than taking the single or double that's available" is the only way out when you invest at "sky high valuations." 😰 "A whopping 37% of "unicorns" are being held for at least nine years by VC funds, including 13% that are past the 12-year mark." 😳 ⌛ Is he right? Is VC at a dire inflection point? Or is Primack prematurely hitting the panic button? 🚨 https://lnkd.in/dts92pXr

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🚀 Excited to speak today at #SuperReturn Berlin - the "State of the Union: How can PE firms find new routes to value creation to thrive in the next wave?" panel!   I joined an esteemed panel: - James Zenni – ZCG - Hazeem Ben Gasem – Invest Corp - Michael Bruun – Goldman Sachs Moderated by Rachel Barton - Accenture   We've dived deep into: 1. How PE firms are re-imagining business strategies and operating models in a more mature and competitive landscape. 2. Whether private markets are still poised to outperform other asset classes. 3. How GPs will update their investment and value-creation playbooks.   ### My Main Thesis: 🔹 **Operators for Operators**: We excel in scaling tech teams from 10 to 100 to 1000 engineers and overcoming technological and operational challenges.   🔹 **Building Regional Hubs**: In a deglobalizing world, we help companies establish regional presences. Our UAE operations are becoming a bridge between large Middle Eastern companies and innovative startups from the Valley and Israel.   🔹 **Adopting Gen AI**: Startups are now categorized as Gen AI natives or non-natives. Those not adopting Gen AI swiftly will struggle to survive. The fastest adopters of Gen AI will gain a new competitive edge akin to the early adoption of personal computers and the internet.   🔹 **Talent Transformation**: The definition of talent is evolving. Gen AI will radically alter how we work and will demand new skills. Quick learners who adapt will benefit the most from Gen AI, which will revolutionize operations, business processes, and organizational behaviors.   🔹 **Data-Driven Future**: In the Gen AI era, all companies will become data companies. Service and product personalization will reach new heights.   🔹 **Future of Companies**: Technology will drive the next wave of value creation across all business verticals. By 2050, at least 50% of the Fortune 20 list will comprise companies that don't exist today.   Looking forward to discussing further these transformative trends and sharing insights on how to leverage Gen AI and technology to drive the next wave of value creation! 🌟   #R136 Ventures #PrivateEquity #Investment #ValueCreation #GenAI #TechTransformation #FutureOfBusiness #UAE #Innovation #Leadership

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Seed VCs are turning to new ‘pro rata’ funds that help them compete with the big firms Alpha Partners, SignalRank and now SaaS Ventures help seed VCs pay for shares when big VCs try to price — or push — them out Lee Edwards, partner at Root VC, has a saying at his firm that “pro rata rights are earned, not given.” That may be a bit of a stretch since pro rata refers to a term that VCs put in their term sheets that gives them the right to buy more shares in a portfolio company during consequent funding rounds to maintain an ownership percentage and avoid dilution. Still, while these rights are not exactly “earned,” they can be expensive. One of the latest trends in VC investing these days are funds dedicated to helping seed VCs exercise their pro rata rights. https://lnkd.in/dRM3RvdA By Christine Hall

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As a GP in climate venture capital, I often meet high-net-worth individuals or family offices new to VC, wondering if they should invest as LPs. While LPs choose which VC funds to partner with, GPs also select which LPs to admit. VC is not a typical financial product—it's a relationship. LPs and GPs will work together in the same fund for the typical 10-year fund life. It's crucial for LPs to understand the firm's strategy before becoming fund LPs and be good partners with the other limited partners, potentially supporting the fund's best outcomes. Common Questions from New LPs 1. Can I take my money back in the middle of the fund? Typically, no. VC investments are long-term, and GPs expect LPs to stay for the full time horizon. Startups need time to mature and exit, requiring patience. However, you can trade your LP shares in the secondary market, though this may involve negotiation and a valuation cut. 2. Can I force the GP to invest or not invest in a startup? No. LPs cannot and should not influence GP investment decisions. GPs have a portfolio strategy and make decisions for specific reasons. Trust the GPs' expertise. If their financial returns align with the fund's goals, join the next fund. If not, look into the reasons but don't interfere. 3. Is VC more risky than growth capital? Many believe early-stage investments are riskier than later-stage ones, but VCs typically return 3x with longer time frame, whereas growth funds return 2x with shorter time frame. Growth investments need careful valuation. The 2022 SPAC wave's stock price drop did not end too well for many growth investors. 4. Does having brand-name co-investors demonstrate a good GP? No. Each fund or investor has its own strategy. Strategic investors might invest for synergies, not just financial returns. Focus on understanding GPs' rationale rather than buzzwords. 5. Should LPs have irrelevant requirements on how GPs should run a fund? LPs need to know the asset class and sectors they are investing in. If unfamiliar, GPs can provide background information. Imposing irrelevant requirements can hinder operations and make GPs reconsider the partnership. GPs prefer constructive input and have limits on the number of LPs and the size of checks accepted. By understanding these points, new LPs can better navigate the venture capital landscape and form productive partnerships with GPs. Fellow GPs, other points to add?

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https://lnkd.in/eZHyRyup Era Ventures, a NYC-based venture capital firm focused on investing in a broad range of business model innovations to catalyze positive change in the built world, launched its inaugural $88m fund. LPs include one of the country’s leading Ivy League Endowments, ICG Advisors, New York Presbyterian Hospital, The Ashforth Company, BentallGreenOak (BGO), Continental General Insurance Company (CGIC), Pelwood Holdings, First American, Bain Capital Ventures, Fenwick & West LLP, and others. Founded by industry veteran Managing Partner Clelia Warburg Peters, and also led by Partner Raja Ghawi, Era Ventures will deploy capital across multiple stages and a full spectrum of sector-focused innovations, from enablement technologies that improve existing processes to disruptive platforms that reshape the industry. The firm has identified seven core business models driving change, including but not limited to SaaS and AI, marketplaces, embedded fintech, and hardtech ventures leveraging new technologies to optimize physical assets, and will actively invest across all of these categories. Fund I has already backed founders across multiple stages: Marketplaces and tech-enabled services: Honey Homes, a digital handyman subscription service provider. Latii, a cross-border construction-materials marketplace. Welcome Homes, a platform to manage and build custom homes online. Ostrich, a next-generation real estate listing service in the UK. Fintech: Shepherd, an embedded insurance platform designed for the construction industry. Truehold, a single-family rental company that combines home sales and rental leases. Homeward, an embedded financial platform powering residential real estate transactions. Hardtech: PassiveLogic, an AI-enabled platform for autonomous buildings. ViaBot, a Robotics-as-a-Service facility management platform. Vertical AI and SaaS:  Indigo, an AI-powered platform to facilitate residential real estate transactions. Peters has been a leading investor in the PropTech space since its early days — first as a co-founder of MetaProp, one of the original, strategically backed PropTech funds, and then as a Venture Partner at Bain Capital Ventures, a generalist venture firm.

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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 ❄ 🚀

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It has never been easy to be an 'emerging' fund manager. However, that challenge has been heightened in the recent private market pullback. A reminder of that in PitchBook. From the article: "Emerging managers have captured only 23% of fund value year-to-date, a 10-year low as capital becomes more concentrated among experienced firms. In this difficult, more cautious environment of elevated interest rates and muted exits, LPs are prioritizing experience to an even greater degree." As an entrepreneur, it is never easy (or fun) going on the fundraising trail and pitching to VCs. However, try to keep in mind, that VCs have to pitch as well. Pitching to institutional LPs is rarely an easy (or fun) task either. As the attached article details, with fewer exits over the last several years, LPs have been forced to pullback on their capital deployment. In this environment, that translates into LPs narrowing their fund manager universe, and doubling down on the names that they know the best. With the share of emerging fund manager capital dipping to its ten year low, let's hope that we have already hit bottom and are working our way to more significant cash deployment to emerging managers (and the companies that they fund). Endeavor Colorado Zeb King Tegan Stanbach Kathryn Dickson #privateequity #venturecapital #entrepreneurship #founders #startups #investing #innovation https://lnkd.in/g-vGdeik

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The state of venture capital is wild right now. We are witnessing a surge of innovation across the spectrum: - Funds merging - VC doing PE - PE doing VC - Secondary funds - Buyout funds - Spin-out funds - Debt funds - Continuation funds - Infrastructure funds - GP turnover - Hard Tech surging - Family Office uptick

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If you're launching a fund- GP commit is a topic that you have had to address with prospective LPs and internally. There's been quite a debate recently on X regarding the true cost of launching a fund- specifically relating to GP commit. A 1% commitment for a sub-$10M fund will be approx $100K and 2% for a $25M fund will be $500K. That's not small change, so GPs are getting more and more creative with what is offered in-lieu of cash. Without commit from a GP, there is little chance for alignment and it shows skin in the game and belief in your investment thesis and capability to perform. Expectations from LP's have increased over the last couple of years from the traditional 1-2% to 3-4% cash and in-kind. Increasingly, I am seeing the following cashless contributions: 🧲Deal warehousing 🧲Waiving of management fees 🧲Reduction of management fees 🧲Fee recycling 🧲Performance-based structures The success and benefit of each depends frankly on your track-record, fund size, investment strategy, AUM and what type of LP is on the table (i.e. large brand name anchor). In my latest deep-dive, I go over the benefits and drawbacks of each, and how it impacts motivation, relationship-building, future fundraising, operational and investment capacity as well as performance. If you're an LP- which of this in-kind contributions do you think is most effective?

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CRV is doubling down on early stage investing. Returning the remainder of our late stage “Select Fund” to focus our efforts on high risk and high multiple early stage investing. Venture capital is as crowded a market as it has ever been. Competition has moved later stage with their dollars and focus drifting to multiple products and geographies, fragmenting their investing talent. We’ve also seen talented investors retiring or putting their feet up. This leaves our home turf of early stage open for the taking. CRV offers one product to our entrepreneurs & LPs (early stage) CRV is one geo (Bay Area) CRV is one team (flat and equal partnership) This picture goes hard.

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Thanks for inviting me TEN Capital Network and Hall T. Martin to talk about some of my favorite topics - climate tech investing and how we are building an energy transition economy in New Mexico.

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Our Lead investor Jabroni Capital decided that our pre-seed round valuation should be $69 Million, which we believe is fair Even though the above statement is satire, Most projects I speak to say something along the lines, when asked for reasoning Average seed round valuations for infrastructure projects are nearing triple digits already And founders don't even know how they are valued, what the fish? Isn't it healthy to calculate valuations based on what you have created? If you are overvaluing your project just because it's a bull market, don't you think when the cycle tops your retail investors will be left with disappointments? and sometimes when I ask whats your plan for the next cycle, they go bonkers. like no one's literally thinking past 12-18months We are so back to 2021 For those of you who know me, yes this is my virtual background during calls It's a kind reminder to be considerate before stating absurd valuations. #web3 #vcfunding #valuations #founders

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💰Sharing a List of 80 Black-led VC funds (US based): About this list: I realized that I couldn’t find a current list of Black-led funds as of 2024 when a lot of new funds have launched over the last couple of years including GPs Sydney Paige Thomas, Terri Burns and more. I have been gathering a list of these funds in my network, and that I could find publicly over time so wanted to share with the ecosystem. Only 2% of VC funds are Black-led: I found 80 funds (maybe there’s more!). There are 3,417 VC firms in the US (according to NVCA). Founders - These funds invest from pre-seed through growth, some with a focus on diverse founders, others more broadly. ⅔ of them have OPEN funding applications that I’ve linked in the sheet. LPs - As mentioned, a number of these funds might not be in the databases used for tracking, so hope to get some more Black-led funds on your radar! VCs - maybe there are some funds you should get to know for deal sharing, etc 👉🏾Link to full list here: https://lnkd.in/gktBhY-W

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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

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Markets talk. We listen. We've from heard from capital allocators (#VC, #PrivateEquity, #FamilyOffices....even #VentureStudios, #Incubators and #Accelerators) that due diligence is a bottleneck to deal flow. It's time-consuming, expensive and often, subjective. We've launched #VentureIQ by the 9point8 Collective to directly address this problem. VentureIQ is an AI-enabled diligence solution that provides rapid scale diligence reports with exceptional fidelity and demonstrable cost efficiency - all within a single business day. We're in our soft launch, now. So, if you want to gain back valuable time and expose the long tail of deal flow diligence, shoot me a DM or visit VentureIQ.ai.

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