Ed Prior’s Post

I’m very excited and proud to announce Sunna Ventures! Sunna Ventures is a new venture capital firm focused on the climate technology opportunity. Climate change not only represents the biggest challenge that our and our children’s generation will face, but it’s also the biggest business opportunity in decades, one that will disrupt energy markets, finance, food production, trade, urban living, migration, etc.   The fund is being launched with the support of the WildSur Inversiones Family Office – the investment arm of the Leria Luksic family from Chile. The family holdings include real estate, mining, food and beverage, banking, etc. and is an experienced investor in alternatives, including venture capital. WildSur has been actively investing in climate technology for the past years, both directly into companies and through funds (LP in over 20 climate and LatAm VC funds). Sunna Ventures will be collaborating on these efforts, particularly the funds portfolio.   Sunna Ventures I is a $40M fund investing in seed-stage startups across the climatetech spectrum, both leading deals, as well as collaborating actively with other aligned investors – including those where we’re LPs. Among the sub-sectors we are investing in are energy transition, critical materials, food and agriculture security, and enablers such as financial markets, insurance and software. Although Sunna will invest globally and independently of the family’s businesses, we see plenty of leverage in working with those businesses and deploying in LatAm markets, where we have deep connections with regulators, clients, partners, etc.   I’ve been working on the climate for a few decades now; from building energy and environmental systems as an engineer right out of college (at Black & Veatch), to leading the climatetech investments at Google during the first cleantech wave, to leading the climate efforts at Salkantay Ventures which resulted in investments like Cultivo and Kilimo. Sunna will be hiring in the next months and will be working with venture partners and advisors that have led some of the more emblematic investments in the climate space. If you are at all involved in the climate space or are interested in learning more about Sunna, feel free to contact me. We'll be announcing our existing investments over the next few weeks and continue to actively look for deals Cheers!!

From Miles Grimshaw to Eva Ho, venture capitalists continue to play musical chairs When Keith Rabois announced helium was leaving Founders Fund to instrumentality to Khosla Ventures successful January, it came arsenic a daze to galore successful the task superior ecosystem — and not conscionable due to the fact that Rabois is simply a large sanction successful the industry. It was astonishing due to the fact that dissimilar successful galore different fields, task capitalists don’t traditionally determination astir precise overmuch — particularly those that scope the spouse oregon wide spouse level arsenic Rabois had. VC funds person 10-year beingness cycles and partners person bully crushed to enactment that course. In immoderate instances, they whitethorn beryllium a “key man” connected a firm’s fund, meaning that if they leave, the fund’s LPs person the close to propulsion their superior retired if they choose. Many partners and GPs besides person immoderate of their ain wealth invested successful their firms’ funds, which gives them further crushed to instrumentality around. So, portion big-name capitalist moves successful task superior aren’t common, they look to person go truthful successful caller months. So acold this year, determination person been notable instances of investors returning to aged firms, striking retired connected their ain oregon taking a intermission from investing entirely. Here’s who we cognize of truthful far: May Terri Burns announced connected May 13 that she was launching a caller task steadfast called Type Capital. Burns was antecedently the archetypal Black women spouse astatine GV and near the steadfast backmost successful 2022. Her new fund volition absorption connected pre-seed and seed-stage startups. Last week TechCrunch scooped that Fika Ventures co-founder Eva Ho was going to modulation retired of the steadfast aft Fika finished deploying its existent fund. Ho is stepping backmost for idiosyncratic reasons. The determination was confirmed by the steadfast successful a blog post connected May 9. On May 9, Alison Lange Engel announced she was taking connected the relation of CEO astatine Ceros, an AI-powered plan company. Lange Engel near Greycroft successful December, wherever she had been a spouse since 2019, to instrumentality the role. After 15 years, Vic Singh announced connected X that helium was stepping down from Eniac Ventures connected May 1. Singh helped motorboat the steadfast successful 2009 and is readying to motorboat a caller steadfast of his own. April On April 30, Ethan Kurzweil announced helium was leaving his relation arsenic spouse astatine Bessemer Venture Partners aft 16 years. Kurzweil volition beryllium launching an early-stage-focused concern firm, according to reporting from Axios. Kurzweil vo...

Very good thoughts indeed from Francesco. The “pain” he relates is also present in our region. I can add another factor that is not dia ussed very much: applying SV framework in other regions (even NY) without adapting for the local context is a recipe for disaster/frustration.

A reckoning is coming for emerging venture funds, and that, VCs say, is a good thing Thousands of caller task superior funds person launched implicit the past fewer years, each hoping to carve retired a long-term, lucrative spot for themselves. PitchBook is tracking implicit 10,000 funds presently trying to rise money, and 45% of them are emerging money managers, defined arsenic a steadfast with little than 3 funds. Those funds are duking it retired for a specified 16% of the full superior that constricted spouse investors volition walk connected task capital, according to PitchBook, down from astir 23% for the decennary that ended successful 2019, earlier the pandemic-era VC frenzy years.  More funds warring for less dollars means a challenging landscape. We took the pulse of emerging money managers astir what it’s been similar for them during these post-ZERP, venture-capital-winter years. For the astir part, things look to beryllium shaking retired rather nicely for emerging managers contempt the economical headwinds.  They admit that fundraising is tough, some for themselves and their founders, which means that in bid to past they are having to get creative. Some firms person had to chopped their money targets truthful they could adjacent and commencement putting the funds to work. They’ve besides had to get successful with the big, multistage firms oregon hazard losing retired connected deals. “It’s truly challenging however rapidly things alteration wrong a marketplace based connected underwriting the benignant of founders we’re looking for and however the nationalist markets look,” Marcos Fernandez, managing spouse astatine Fiat Ventures, told TechCrunch. “If someone’s retired determination arsenic a solo GP oregon adjacent a mates of GPs without truly thing excessively unsocial extracurricular of being erstwhile operators, entrepreneurs, it’s truly hard to rise an emerging money close now.” A antithetic benignant of fundraising When Joanna Drake, co-founder and managing spouse astatine Magnify Ventures, went from being an entrepreneur to an investor, she had to larn that fundraising for a startup is wildly antithetic than for a fund. Joanna Drake, co-founder and managing spouse astatine Magnify Ventures. Image Credits: Joanna Drake “I recovered gathering the emerging money 1 of the hardest things to do,” Drake said successful an interview. “There’s truthful overmuch complexity astir getting a first- oregon second-time money disconnected the ground.” As an entrepreneur, you person a abbreviated database of firms, you acceptable your people date, instrumentality meetings and wrong a definite play of clip cognize if you volition beryllium palmy raising for your startup oregon not. As an emerging money manager, “you tin really rotation for years taking meetings w...

Almost a month ago in Dec’23, we all witnessed a landmark publishment in the VC ecosystem, with Blume Ventures releasing Omega files, a first of its kind detailed deconstruction of their Fund I in the public domain. Fund I – Vintage 2011, also holds an even higher significance as the same period coincided with the emergence of early stage VC Investing in Indian startup ecosystem.   Diving into the content from the deck, I looked to corelate the publishment with those from PE funds (seldom publicly available) and understood how the various Fund elements between VC funds resemble, or show distinction with the conventional PE funds by noting down my observations:   ●  Fund raising:  Being a first time manager, extremely tough conversion ratio of 1:6 to the pitches, with 70% of the raised capital being sourced from HNIs/retail LPs which is typically unalike the PE fund raise where Institutional LPs form the larger pool of capital, via placement agents   ● Deal Sourcing:  99% of the deals came through Referrals or 1st degree networks – showcasing the pure grit, and brilliance of their Investment Team. In a PE fund, deals are usually placed by the buys side IBs which also help with advisory, prelim. diligence and financing at many-a times   ●  Founder focus in Thesis:  While late stage funds are focused on purchasing established businesses at discounts and then expanding Multiple and EBITDA, Founder pedigree becomes a crucial element in Investment Thesis for VCs   ●  Pareto Principle:  Pareto principle was clearly at work in the VC fund – Top ~20% of the 78 investments generated 98% of the Gross returns. For a PE fund, returns are usually spread across the portfolio with a relatively few laggards, in line with their minimum downside risk principles while Investing   ●  Practice of Reserves and Continuation Funds :  Blume kept a unique reserve in their funds for follow-on Investments in the marquee assets in the later stage series rounds, which eventually proved to be a brilliant risk/reward strategy. Practice of Continuation funds, is already usual in the PE space, as GPs look to continue their trophy Investments through another SPVs and realizing returns for the main Fund LPs   ●  Sector/Geography at play:  SAAS Investments ( 9.9x) outperformed the other consumer and SMB focused portfolio (3.2x) by a massive 3x – resonating with the boom SAAS has garnered over this decade. On a rather interesting insight, Delhi and NCR borne startup Investments( 15% portfolio) gave them a surprising 14.9x, leaving the Investments in startup metros – Bangalore (2.4x) and Mumbai (5.8x),with a cheeky smirk 😊   ●  Exit profile:  Despite ~ 50% write-offs, the portfolio companies in other 50% give us a glimpse of Exit route/returns in the space – Secondary Sale/IPO (forming 8% of exits with 30.9x), Continuation Vehicle sale (12% with 13.5x) and 30% through M&As by late stage Investors generating 2.6x returns   Info Courtesy: Omega Files | December 2023 I Blume Ventures

My work with startups has increasingly led me to engage with #VCs and fund managers. As we are seeing an uptick in new funds in Europe and the US, it is important we keep track of movement in the industry. This newsletter for emerging managers and first-time funds in #EU, #MENA, and #US has just launched, and I highly recommend it if, like me, you want to learn more. @tatjanadekerros

For many emerging venture capitalists, it's been a challenging past couple years. The startup market had previously been a state of unceasing growth for more than a decade. But that came to a halt in 2022. With valuations declining from their previous lofty highs, we've seen a real shift in the sort of performance metrics that venture funds are posting in their earliest years of deployment. For instance, among funds on Carta that closed in 2019, the median vehicle had an IRR of 19.4% at three years after inception. The median IRR after three years for funds that closed in 2021 was -1.5%. That's quite a gulf. But it's still early—very early—in the lifespan of any venture fund that closed in the past few years. And investors are optimistic that, before too long, some of these latest vintages might start to look a lot more appealing. “The best fund vintages have tended to be right after a bubble,” said Stephanie Choo, who leads the North American investment team at Portage. “So, 2010 and 2011 vintages were really good. The 2003 and 2004 vintages were comparatively good. You would expect that 2022 and 2023 vintages will end up pretty good, as well.” My latest story (link in the comments below) digs a little deeper into how investors are thinking about the data on these latest fund vintages. A big thanks to Stephanie and to Marcos Fernandez for sharing their thoughts and expertise!

We're glad to share a recent article published by a reputable online publication Science|Business, which sheds light on the Estonian cleantech investment landscape. 💸 Our cleantech sector is witnessing a significant investment boost thanks to the establishment of the SmartCap Green Fund by the state-owned fund management company SmartCap. The Green Fund serves as a pillar of support for both early-stage ventures and those aiming to scale-up and expand internationally, with a particular focus on hardware – hardware solutions often face greater challenges in attracting venture capital compared to software. 🏭 The fund size is €100 million, and the capital is invested through private venture capital funds. Throughout 2023, the fund made six investments in early-stage startups. The plan is to start investing at later stages with more substantial ticket sizes moving forward. Our CEO, Kädi Ristkok, shared her thoughts. “Starting from series B is where we really struggle to find investors, and we need to attract more foreign growth investors,” she said. “So, it seems logical that SmartCap should be the public risk-taker to initiate private investors into this sector." Two private fund managers have been selected to establish two dedicated investment funds for clean technologies: 2C Ventures and SFV. Each manager will receive an initial investment of €20 million to kickstart their respective funds. Great job, SmartCap, for taking an important step in providing better support for our cleantechs. 👏🏼 Read more: https://lnkd.in/djvBXgWz 📸 UP Catalyst, one of the startups supported by the SmartCap Green Fund, is scaling up to produce tonnes of graphite from carbon dioxide. The article also mentions Bisly - Scalable Building Automation, eAgronom, Paul-Tech, Vok Bikes, Cuploop, WasteLocker and Stargate Hydrogen.

❄️ Series A winter is here. Should LPs adjust their early-stage venture strategies? 💣 ‘Power law’ returns are most pronounced in Seed/Pre-Seed venture, which boasts the highest mean return across the asset class at 50%. However, accessing this return comes down to securing exposure to the handful of outliers in any given vintage— with just a 3% Seed-to-Unicorn success rate, that's no easy feat. 📍Getting to Series A represents a pivotal step on that journey. Pre-ZIRP, roughly 30% of Seed companies made it to Series A. However, this graduation rate meaningfully increases in other stages — 60% of Series A companies made it to Series B, and the same goes for Series B to C and C to D. 🎓 Today, the Seed-to-Series A graduation rate is under pressure and shows no sign of easing. Series A investors are holding out for goldilocks companies that balance growth and profitability, and a bloated post-ZIRP pool of companies means there are plenty of options. 🏗️ For LPs navigating the high-risk, high-reward ecosystem of Seed venture, a tougher bar for Series A sparks questions about the right approach to portfolio construction in this landscape. 🥅 High-volume seed investing theoretically mitigates some risk by giving fund managers more ‘shots on goal,’ increasing the probability of hitting outliers and achieving a consistently attractive return profile. 🤝 However, a colder Series A environment may favor a more concentrated approach to investing in which investors can take on a more operator-adjacent role in proactively helping their companies progress. This strategy comes with its own risks, requiring a higher success rate from fewer investments.

The game in venture capital is about outperforming 📈 We're not just competing against other funds in our industry, but also against other private and public asset classes like PE, private credit, public shares, bonds, etc. There's a lot you can control in how you drive that performance (i.e. founder sourcing, portfolio support, sector focus), but there are even more factors that are largely out of your hands. 😷 Global pandemics 🏦 Bank failures 📉 Global market performance That's why large allocators (i.e. LP investors) like to invest across what are called "vintages", or in short, the year a fund was started. This helps large LPs diversify their exposure to unknown macro-economic conditions not just in venture, but across other asset classes. It also helps them take advantage of great years that nobody anticipates. 2024 and 2025 will go down as one of the better vintages in early venture investing 🌱 Valuations are back to reasonable levels, founders are focused on solving tangible problems today, and investor expectations have shifted from "growth at all costs" to "scale after you find product-market-fit". What we're seeing today isn't new either. There was a similar story in 2003-2004 or 2010-2011 following larger macro economic challenges (i.e. the dot com bust or the great recession). Thank you to Kevin Dowd and the team at Carta for allowing us to share our perspective in their latest article. He and the team have a treasure trove of data that help really bring these insights to life. Grateful to share our vantage point from Fiat Ventures and Fiat Growth, and to collaborate with other top tier investors like Stephanie Choo at Portage . Read more via the link below, and let me know your thoughts on the current market and fund vintages 👇 Drew Glover Alex Harris Victor Colombo Kristin Manoogian Adrian Hunter Kaley Nivens Pate Ayesha Dillon