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- #155 Venture Insights & Small VC Fund Outperformance
#155 Venture Insights & Small VC Fund Outperformance
👋 Hi, I’m Doug! Welcome to @TheFundCFO crew! Every Tuesday/Thursday, we publish VC/CFO insights that matter - highlights from notable VC GPs, LPs, and CFOs/finance pros. Check out our VC Fund Playbooks, Models, Budgets, & Compliance Checklists @ Streamlined.Fund! Love what we’re doing? Consider upgrading to paid for deeper dives on Thursdays (most paid subscribers expense these insights!).
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Venture Capital Insights - YTD 2024
We’ve made it to Memorial Day Weekend 2024 - congrats! We’ve been inspired recently by a number of insights and wanted to share some highlights here:
Aumni Venture Beacon Year End 2023 Report: The prevailing narrative since the end of 2021 has been one of stress feeding through venture markets owing to a combination of a higher rates environment, banking market volatility, and subdued IPO markets. Median post-money valuations fell ~50% from 2022 to 2023. These developments were accompanied by steady increases in the prevalence of down rounds through last year.
Where do we stand now in 2024? At the macro level, the picture in 2024 remains mixed. Supporting a more constructive view, one can point at market commentary generally more centered on rate cuts than hikes. Meanwhile, the Nasdaq is sitting close to 2021 highs following a period of strong performance, and a growing number of companies are achieving IPOs with strong post-listing performance.
Valuations: While valuations are nowhere near the levels seen in 2021, data does indicate some recent improvement from last year, but with a bifurcation of performance by stage.
We recently came across a post by Dan Gray on performance and persistence in VC - what does it take to stick around for the long haul?
- Initial fund performance seems to be a question of 'right place, right time', rather than skill — though relative performance for emerging managers is strong.
So, as always, averages suck and common wisdom is a curse. All you can do in venture (as an LP, or as a VC) is evaluate each scenario individually, with your best judgement.
