Steven Cho

Interesting data and good work from Carta in their inaugural VC fund performance report analyzing benchmarks for more than 1800 funds across six recent vintages - https://lnkd.in/e5R_dhXp Take a look at the pace of investments. As expected, capital deployment has slowed since the 2020 peak, with 2022 funds only using 43% of their capital after 24 months, down from 60% in 2020. This trend seems broadly consistent across private company and fund investing, with GPs and their LPs being more cautious and selective with capital allocation. Raising capital is tough today. Full stop. It's easy to focus on that, but I'd encourage us all to instead consider and focus on what is less talked about - that this cautious approach has created a large amount of available capital aka "dry powder," dedicated and ready to support special founders. The best founders are aware of private market dynamics, which impact the time needed to raise rounds and the milestones they must hit to successfully do that, but their primary focus is always the mission and the customers they serve. They are committed to building products to solve their customers' problems regardless of what us investors think. Building generational companies is never easy, but many have been and will continue to be built in tough markets. I try to take a similar approach in supporting founders. That doesn't mean ignoring market conditions, which can greatly impact my investment decisions and outcomes, but like focused founders, I know it makes more sense to dedicate my limited daily energy to what I can control. That means finding and supporting founders who are transforming or creating markets and doing everything I can to help them win, no matter what the market is doing. I hope to collaborate with many doing the same. Have a great week and see you out there! Note: These thoughts and opinions are solely mine and and mine alone. They do not reflect and are not associated with any company I am part of.

19

1 Comment

The recently published Institutional Investor Digital Asset Study from Fidelity Investments certainly has some eye opening stats to browse through. Cudos to the team for a clear and concise overview. What stuck out most was the top reason investors cited for their change of view on the space... 💡 increased understanding 💡 This is still a new asset class, demonstrably so in the United States where acceptance has been slow. Increased education and understanding is paramount. Anyone with questions, reach out, always happy to answer incoming messages. Some other interesting tidbits: 1) Price volatility remains one of the largest barriers to entry [more thoughts to share here but at a later date...] 2) 30% of respondents saw digital assets as their own, unique asset class [interesting, what is your allocation to it?] 3) US investors remain the least accepting of digital assets [I think this really goes back to the first point of the post, increased understanding and truly think the tide is turning] If you are curious about the space, here to help through it. As someone who spent a decade working with fintechs and financial companies I get the skepticism. As an investor however, skate to where the puck is going, not where it has been the past twenty years #digitalassets #crypto #blockchain Full Survey (link below) https://lnkd.in/g7h2_Bq8

20

🧐 What’s the market like? 📊 Here are 🔟 private equity talking points: 1️⃣ Fundraising Decline: Global private equity fundraising contracted by 11% to $1.2 trillion in 2023, reflecting a challenging environment for capital raising 🏦 2️⃣ Drop in Deal Value: Buyout funds generated $558 billion in deal value in 2023, a sharp ↘️51% decline from the previous year. 3️⃣ Fewer Transactions: The number of private equity deals fell by 25% in 2023, highlighting cautious market behavior 📉 4️⃣ Mega-Funds’ Success: Despite the overall fundraising challenges, mega-funds (over $5 billion) secured a record 💰 $445 billion in commitments, up 📈51% from 2021 5️⃣ AUM Growth: Private markets assets under management (AUM) grew by 12% to $13.1 trillion 💹 6️⃣ Increasing Deal Activity: Two-thirds of private equity investors expect deal activity to 🎢 increase in 2024 7️⃣ Impact of High Interest Rates: Higher interest rates are prompting companies to seek more equity financing, creating opportunities in the secondary market ⚖️ 8️⃣ Sector Dynamics: Technology investments remain dominant but dipped slightly as a percentage of total deployment over the last year 💻 9️⃣ AI Integration: Private equity firms are set to expand their use of artificial intelligence in 2024, particularly in due diligence and portfolio management 🤖 🔟 Regional Fundraising Success: Fundraising in Europe surged by over 50% in 2023, marking the region’s most significant haul ever 🌍 Sources: Bain & Company, PwC, EY, MorganFranklin Consulting, McKinsey, BlackRock, Morgan Stanley #PrivateEquity #Investment #Fundraising #AI #Technology #2024Trends #MarketInsights #DealMaking #CapitalManagement

13

In summary… smaller investment funds often outperform larger ones due to: Early-stage focus: Higher risk but greater potential for large returns. Higher return impact: A single successful investment can significantly boost total returns. Closer to innovation: Managers, often former entrepreneurs, have better insight into new technologies and talent. Lower costs: Smaller funds face fewer regulatory burdens, reducing overhead.

2