Sydecar’s Post

Illumen Capital is doubling down on its support for fund managers and founders from underrepresented communities. The firm is an impact fund of funds that has previously supported ways to address racial bias in investing. Yesterday, the firm, founded by Daryn Dodson, announced the raise of a $32.75 million “Catalyst Fund “to once again support emerging fund managers and founders, especially those hailing from underrepresented backgrounds. The news comes during a fraught time for many diverse funding managers and founders, who are seeing less financial support than in the years before. Black founders raised less than 1% of venture capital funding last year, according to Crunchbase, and as of H1, was on track to continue seeing a funding decline. Read more below! https://lnkd.in/e3hfCkpM

Many #emerging managers are struggling to raise their funds in this market, however, the best GPs who've proven themselves, continue to close their funds. According to a recent Pitchbook survey, 13% of GPs interviewed plan to not raise another VC fund, which is up from 6% over 2023. We at 1200vc look forward to investing in more #GPs over these next few vintages as more traditional #LPs continue to pull back their allocations. https://lnkd.in/gE-vFn6R

Good overview of a very timely issue and topic by Charles Hudson Scenarios 1) Wont happen if at all for years - multi stage is here to stay at the early stages and raised billions to do it 2) We all need multi billion exits to really make our models work 3) LPs are really buying up the seed product right now as a "safer" bet Either way this hurts true early stage pre/seed funds and emerging managers, though many of the multi stage LPs dont really invest in them, they would be wise to.

What the numbers say: Tiger initially planned to raise $8B for the latest fund but revised its target to $6B due to economic headwinds. By Feb. 2023, the firm had lowered the target further to $5B as rising inflation and high interest rates spooked investors. 20% of the fund’s commitments came from Tiger insiders, traditionally the most prominent investors in their funds. What happened: The news comes after venture chief Scott Shelifer stepped down from his role in November. Founder Chase Coleman took over Shelifer’s responsibilities. Shelifer pushed the firm to invest heavily in the sector. However, due to the downturn, Tiger had to mark down the value of its portfolio by 33% in 2022 and by another 6% last year. Tiger slashed the valuation of the PIP 15 fund by 18% at the end of Sept. 2023. PIP 15 is Tiger Global’s largest fund yet to date, closing at $12.7B in 2021. Tiger’s assets under management halved from $100B in 2021 to about $50B in Sept. 2022. Where to see the impact: Tiger joins a growing list of VC firms that have missed their fundraising targets as investors remain cautious about investing in VC and private equity due to global economic volatility and slumping startup valuations.

VCLink's Weekly Investor Fundraise Report: 1. Joshua Kushner's Thrive Capital closes over $5 billion for its ninth fund, Thrive IX. The fund, which saw participation from undisclosed investors, will invest in both early-stage and growth-stage companies, with $1 billion designated for early-stage investments and $4 billion for growth-stage investments. Thrive IX aims to support companies with the potential for sustained growth and transformation over many decades. https://lnkd.in/eS-PEdWN 2. Ian Lessem's HAVAÍC has raised $50 million for its third fund, African Innovation Fund 3. The fund, which received participation from Universum Wealth, SA SME Fund, and various local and international family offices, will focus on supporting African tech entrepreneurs in scaling into new markets and generating diversified revenue. This fund aims to strengthen HAVAIC's portfolio, which currently serves over 20 million clients in 190 countries worldwide. https://lnkd.in/eg2VpJpy

Capsule supports VCs at all stages with their insurance needs, so we're particularly delighted to work alongside Ada Ventures on their Diverse Emerging Managers Dinner series, which connects first-time fund managers with LPs from their network. Improving access to venture capital by supporting first-time fund managers who seek to drive investment performance alongside positive impact is crucial, considering the underrepresentation of ethnic minorities and women in the venture ecosystem - especially considering diverse teams have 20% better average returns! Last Tuesday's dinner for first-time emerging fund managers and LPs was full of great insight; check out some of our key takeaways below: 🔎 Finding LPs: Utilise networks like The Impact, Phenix Capital, and 2X Global. Understand that fundraising is a lengthy process and involves extensive networking. 🎤 Pitching LPs: Tailor your pitch based on LP motivations. Clearly explain how your impact strategy drives expected returns. Demonstrate your track record and strategy alignment. 🏃♂️ Demonstrating Track Record: Leverage sweat equity, angel syndicates, and share your pipeline with LPs to build credibility and demonstrate your sourcing and vetting abilities. 💸 Fundraising is a Sales Process: Build a robust LP pipeline, tailor your pitches, and focus on demonstrating your ability to return 3x capital in 10 years. #VentureCapital #Fundraising #EmergingManagers #ImpactInvesting Chloe Dagnell - Isomer Capital // Misodzi M. - British Business Bank // Christelle P. // Christian Tooley - i³ investing // Izzy Obeng - Foundervine // Deepali Nangia - Speedinvest // Marquis Caines - Diversity-X // Chisom Udeze - Diversify // Diarra Smith - Ada Ventures // Alice Garnier

VC Enhances portfolio returns For many years private equity was seen as one of the smartest divesification strategies away from listed equities, bonds, and liquid alternatives. One of the principal reasons for private equitie's outsized returns was that investors typically had to give up liquidity with 7 year lockups (or something around that number) Private equity has run into several problems, foremost amongst them is too much cash chasing too few returns, the 2nd big problem is that private equity investors used increasing levels of leverage in order to purchase the companies, while paying themselves dividends no matter what... just look at what happened to Thames water. The 3rd and most recent problem is rising interest rates which has of course not only impacted borrowing costs but has impacted the companies themselves with higher required IRR's in order to offset increased costs both for input prices as well as funding. The area that is now becoming very attractive and that investors should pay attention to is earlier stage venture capital. Venture capital is usually 1 of the 1st rounds of funding for a company that is still growing, requires capital to actually begin to deliver results, and a much more binary investment with some of the comapnies failing, some of them doing nothing, and if you're lucky a few doing very well. *The difficulties therefore venture-capital portfolios include: * assessing the risks * doing due diligence * building a sufficiently large portfolio so that the winners compensate you for the losers * maintaining contact with and understanding what the company is doing * avoiding dilution if you don't follow your initial capital with more capital your ownership percentage will reduce * diversification.. i.e. diversified across different industries What I'm pointing out is you can have some significant outsized winners if you invest early and stay on top of your investment. This article points out that seasoned venture-capital firms with a strong track record of identifying winners stands a much better chance of raising capital than the start ups and some of the smaller funds who can't achieve diversification or don't have a pipeline of good deals. But the take away from this article is that venture-capital is very attractive in the current market environment, and that it should form part of your portfolio albeit a potentially small percentage 5-10% but can represent a very important part of your portfolio in terms of total compensation if you get it right Happy to discuss in more detail, welcome your thoughts... #Venturecapital #vc #privateequity #equity #investments #markets #portfolio #SiliconValley #investing

New Post: Illumen Capital doubles down on supporting underrepresented funds - Illumen Capital is reinforcing its commitment to support fund managers and founders from underrepresented communities by launching a $32.75 million "Catalyst Fund." Founded by Daryn Dodson, the firm aims to address racial bias in investing, particularly as diverse founders face declining support. Last year, Black founders received less than 1% of venture capital funding. The Catalyst Fund will prioritize first-time venture managers and early-stage founders, with at least 65% of capital allocated to them. Dodson emphasizes the fund's goal of showcasing the value of diverse-led funds and plans to deploy it within the next year and a half. Read the full article here https://lnkd.in/d-Kwm_wt #Venturecapital #VC #investment #LP #Limited Partner

Discover how LTV Capital is revolutionizing VC exposure in Jon Whiteaker’s article on The Drawdown. LTV Capital's new fund-of-funds aims to better connect LPs with emerging managers, addressing the challenges of fundraising across various markets. Explore the innovative strategies LTV Capital employs to navigate these complexities. https://lnkd.in/exNC5m8J #GPStakes #GPStake #GPSeeding

In Venture Capital, the word is 'diversity.' Yet, for many, it's a word, not action. The industry stands proud, talking of change. But the ground is hard for those starting fresh, especially if they're not the usual face in the crowd. Studies speak—diverse funds and first-time managers do well, often better. But the money goes to the old hands, the known faces. It's a missed shot, not just in fairness but in smart investing. The world changes, markets evolve, and new voices find what we miss. It's time, past time, for venture capital to act, to invest in diversity not as a nod but as a necessity. This is not charity; it's wisdom. In his revealing article, Jason Mackey shines a light on the stark contrast between the venture capital industry's public embrace of diversity and the challenging realities faced by diverse first-time fund managers. #VentureCapital #Diversity #InclusiveInvesting https://lnkd.in/eGndmsnD