#45 Pace Yourself VC's! 2023 Pacing Update

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“Work with high quality people. Life’s too short to burn bridges. Remind yourself that it’s a marathon, not a sprint!”

VC Fund Capital Deployment in 2023: Pace Yourself

For those that don’t know, I started as a LP investor back in 2010. I led investments in both larger, more established funds (i.e. True Ventures, Founders Fund, a16z) and smaller, newer funds (i.e. 137 Ventures, Costanoa, Placeholder). A recent search on investment pacing surfaced the above quote from Greg Sands at Costanoa.

Greg’s quote about VC firm building also applies to VC fund capital deployment, or investment pacing, in 2023. Pace yourself. “It’s a marathon, not a sprint.”

So far in 2023, VC funds have continue to move slowly with capital deployment. This is backed up by both anecdotal evidence from more than 100 VC investors / finance professionals, as well as data already reported in 2023.

My view is that the slower pacing is driven a number of factors, including the macro environment, fewer attractive startups fundraising, stronger investor requirements for startups that are raising capital, and LP investors having smaller budgets to invest into VC funds (the “denominator effect”). So what next?

Investment Pacing Resources

VC’s investors and professionals need to be aware of the current environment, accounting for the factors referenced above, and pace themselves. Here are our top resources and articles we’ve seen recently on investment pacing for VC’s and LP’s:

That’s all for today folks! Thanks for your support and for spreading the word! Share this on Twitter or LinkedIn to help grow “the crew!”