All Chance Hub’s Post

Billionaire Family-Backed Firm Raises $100 Million Venture Fund, Congatuations Mark B. 👇 HIPstr, the venture arm of Mark Bezos and David Moross's HighPost Capital, raised $100 million from investors including rich individuals and institutional firms for early-stage deals outside its traditional buyout focus. Why is this so significant? As the venture capital ecosystem continues to evolve, family offices are increasingly seen as pivotal players. Challenging macroeconomic conditions such as higher interest rates and inflation, as well as tighter credit markets, have put downward pressure on the direct investing portfolios of many family offices over the past couple of years. Some have responded by slowing or ceasing direct investing. But the family offices with the greatest AUM have tended to take the opposite approach, doubling down in the expectation of benefiting from lower valuations and opportunistic situations. An investment firm founded by Jeff Bezos’ younger brother Mark Bezos and a US private equity veteran that focuses on consumer bets has raised its first venture fund. Read more below. #FamilyOffice #UAE https://lnkd.in/dm8d2RcM

Congrats to Gaurav and Stephen for raising $500m for JP Morgan's debut life sciences venture fund, including undisclosed corporate LPs. https://lnkd.in/ehxigFFn It might be less than the $650m i-bank peer Goldman Sachs raised for West Street Life Sciences I in January but points to an emerging trend for the big financial services firms to finally be taking venture seriously and use their distribution muscle to raise large amounts and put them in the same category as experienced VCs like Foresite Capital that are on their sixth fund (and congrats on raising $900m this week!) It also points to the forthcoming challenge a lot of the independent VCs will face - few folks want to give them money. Pitchbook noted 13% are not planning on raising another fund and Joe at Inc lays out some good reasons why https://lnkd.in/ea9s-7ha But crunch the LP data on the VCs that do raise and raise again and you'll find there's a good indicator for these folks - delighted to share at the www.GCVsymposium.com

Norwest Venture Partners is breaking records as it raises $3 billion for his 17th vehicle! Norwest Venture Partners is making headlines once again as they raise a staggering $3 billion for their 17th fund, maintaining their fund size despite the current market downturn. Founded 65 years ago and backed solely by Wells Fargo, #Norwest Venture Partners has been a powerhouse in the #VC space. With a legacy of success and innovation, Norwest is led by senior managing partner Jeff Crowe, who has played a pivotal role in the firm's growth and impact. Backed solely by Wells Fargo, Norwest's latest fundraise of $3 billion is a testament to their continued strength and resilience in the face of market challenges. Despite the downturn, Norwest remains committed to staying competitive in the dealmaking environment, focusing on growth equity, healthcare, and investments in regions like India. Norwest's diversified approach sets them apart, allowing them to navigate market fluctuations with agility and foresight. Operating globally with investments in North America, India, and Israel, Norwest's multi-strategy fund encompasses early-stage and growth equity businesses, with a recent addition of a biotech team to enhance their healthcare practice. The article on TechCrunch in the first comment. Want to stay up to date with the market? Here my newsletter: - Linkedin: https://t.ly/s541W   - Substack: https://lnkd.in/dzfGJzmW

"Last month, Santa Barbara Venture Partners took the unusual step of selling shares of its portfolio companies to generate capital to return to its limited partners. Sales are by no means traditional exits—investors generally expect cash-outs like initial public offerings or acquisitions. But the secondary transactions have shown that SBVP can make money for its investors, said Dan Engel, its founder and managing partner." OK, I get it - the need to show LP's distributions is understandable, if not always optimal. So far, so good. Then I kept reading. SBVP was launched in 2020 and by 2022 was out raising a second fund. Well that was quick. Engel then noted the "fundraising market began to sour, LPs demanded more proof of traction." If your LP's expect tangible proofs of traction from a 2 year old early stage venture fund, they don't understand the asset class. Depending on the survey, average time to exit for a venture backed company is 7-10 years. A sale 2 years after investment rarely represents a big win, when such a big win occurs it is pretty much the venture equivalent of winning the lottery. You don't invest with the goal of a big exit in 2 years. However, the issue is not just LP's. Historically venture funds raised every 3-4 years. During the 2021 Bubble this dropped to every 1-2 years. Similarly, companies fundraised every 18-24 months, during the bubble this often dropped to less than a year. The net of this is the following: 1. Historically, when you fundraised a successor early stage fund, no one expected exits, but you were usually able to show valuation increases because many of your portfolio companies completed at least one follow on round before you started your fundraising. 2. In the current environment, venture fundraising is returning to the 18-24 month time horizon and the down market has in effect extended this through convertible notes/SAFEs/flat rounds. As a result, a two year old fund out there fundraising, not only can't show exits (which LPs should not expect), but in many cases they are not showing valuation increases. That might explain the large number of first time funds not raising successor funds. These secondary sales might make the picture look "nicer" for the moment (and maybe help some funds raise successor funds), but likely will reduce LP returns in the long term.  

The market for venture secondaries continues to look super interesting given ongoing illiquidity for private VC backed companies.

Exploring the rise in LP defaults, 3+ Ventures steps in, raising $300 million to purchase distressed stakes and inject liquidity into the venture ecosystem. #VentureCapital #LiquidityCrisis #InnovationStrategy

I don't do a lot of stories about firm/fund launches, but I thought this one was worth digging into because of the existential debates currently happening about the future of venture capital. The VC asset class has expanded enormously over the last 10-15 years. Many of the biggest firms have tens of billions of assets under management and are only getting bigger. It has made me wonder whether VC firms must become next JP Morgan / Blackrock / Blackstone, accumulating as many assets as possible and raking in fees, or else wither and die. (Bigger funds tend to mean lower returns, btw.) The other big question is whether the firms that cling to the old school, traditional unscalable VC model can survive in a world of giants. Some investors are trying to forge a new path in the middle. I thought Nicholas Chirls' approach with his new firm, Asylum, was interesting. It will stay small, invest slower, and seek out companies that require less funding. He wants to model the firm after A24, the indie film studio. Read more about it and the broader industry debate happening here: https://lnkd.in/gXmnviv5

In the past few years many VC firms have raised new funds smaller than their previous funds, which goes against the historical trend. The weak fundraising environment definitely had a lot to do with it, but some investors chose to scale back. This trend suggests some VCS are taking a more cautious approach to investment, driven by market uncertainty and a greater emphasis on long-term value creation. Investors are increasingly focusing on sustainable growth, thorough due diligence, and supporting their portfolio companies through more turbulent times. For founders, this means a stronger focus on capital efficiency and building businesses with a solid path to profitability. For VCs, it’s about balancing the need for returns with a more thoughtful, patient approach to backing the next generation of innovators. I'm of the view that this is all good for the industry and the economy, but I do wonder where all this capital efficiency is going to come from after two years during which most of the startups that have managed to stay afloat have already been forced to cut costs to the bone. Interestingly (from my perspective, at least), one area where many startups could still cut costs considerably without sacrificing quality is on legal fees. I'll be discussing how next week at Startup Boston. Register here: https://lnkd.in/e9a4S2TP. #VentureCapital #Fundraising #Startups #InvestmentTrends #SustainableGrowth #Entrepreneurship #VC

𝗧𝗵𝗲 𝗣𝗼𝘄𝗲𝗿 𝗟𝗮𝘄 𝗶𝗻 𝗩𝗖 𝗙𝘂𝗻𝗱𝗿𝗮𝗶𝘀𝗶𝗻𝗴: General Catalyst, a16z capture 44% of US VC fundraising in 2024 Despite a major LP pullback from venture, an elite cohort of VC firms is still successfully raising huge sums of LP capital General Catalyst, a giant of Sand Hill Road that has led rounds for companies like Snap, Warby Parker and Deliveroo, is wrapping up a $6 billion VC fund, the Financial Times reported Sunday. Earlier this month, Andreessen Horowitz announced it had raised $7.2 billion across five fund strategies. Some LPs have retreated toward top-tier venture firms in recent years or refused to sign on with new GPs, reflecting a slowdown in appetite for emerging managers. So far in 2024, the top five largest US VC funds have raised $10.7 billion out of the total $23.7 billion closed across all new US VC funds Source: PitchBook

Big news from Index Ventures! We’ve raised $2.3bn in new funds—an $800m venture fund and a $1.5 billion growth fund. Across nearly three decades of investing, this latest announcement is possible because of a strong foundation built by exceptional entrepreneurs, incredible LPs, and a team of investors, strategists, and operators all deeply committed to our craft. 108 Index-backed companies have reached a valuation of $1 billion or more, 23 have surpassed a $10 billion valuation, and 57 became publicly traded companies. I look forward to seeing what the next generation of entrepreneurs will create. I can only imagine it will be even better than what I can envision today :) https://lnkd.in/gDxiN8ig