Trends in venture capital

Facts I didn’t know
– venture capital as a class is cash flow positive
– venture returns for top quartile funds are better than the market over the decade
– 10 funds raised half of the money committed in the industry in recent years
– 2014 is a bumper fund creation year
– “private IPOs” and big late stage private valuations are where the $$ goes
– but there are a zillion tiny funds. The barbell
– LP advisors think of $50mm funds as starters and would like to follow managers to their next/bigger funds, though it’s a risky shift
– LPs and GPs love secondaries
– people fear health care, but are warming to Healthcare IT after a dark period

What it means to founders
– 2015 is going to be awesome for early stage company creation
– and awesome for growth companies that aren’t yet in the IPO window
– some of the hip seed funds are trying to become institutional eg Rothenberg or Vayner. Their style will be changing too.
– sell secondaries! Liquidity for angels and founders

Amol Sarva Ph.D. // @amol // // 530-727-8277

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