MedArrive’s Post

According to Pitchbook, the worst M&A and IPO environment in over a decade is forcing many VC firms to consider selling their startup stakes to secondary buyers in order to return capital to LPs. While VCs are exploring all flavors of secondary solutions, continuation funds are gaining more momentum. These vehicles allow existing LPs to sell aging assets to new buyers or roll those investments into the new fund. But despite the massive increase in interest, hardly any VCs or crossover funds are ready to pull the trigger on such transactions. That may change as assets are marked down further. Secondary buyers are asking for a much higher discount than most VCs can stomach. Investors don't expect many more of these deals to start taking place until there's a reset in valuations. #privateequity #venturecapital

Outward VC Raises £51m in First Close of Fund II to Help Early-Stage Founders Breakthrough “Starting out as a Founder is one of the toughest challenges out there, especially at the early stage. Our new fund continues our mission to make the early-stage experience easier for Founders, starting with leading their first institutional funding round. As a testament to our personalised approach, we are often the first call that our Founders make when facing an important challenge”, Devin Kohli, Outward VC Co-Founder.   https://lnkd.in/eYbZ4FPE Amy Brill British Business Bank Ken Cooper Curve Shachar Bialick Janine Hirt Innovate Finance Kevin Chong #fintech #finance #banking #paytech #payments #fintechnews #paymentsnews

New year, new SEIS fund!! To kickstart 2024, we've teamed up with early stage investor Fuel Ventures 🚀 to help further democratise access to SEIS investing and to provide retail investors with tax-efficient diversification in early-stage businesses. Fuel’s mission is to back disruptive and ambitious founders. It has an established track record and across all its funds, as at May 2023, had deployed £130 million+ into over 100 companies. Notable recent exits include ContentCal to Adobe and Capdesk from Carta to Carta. Now, thanks to this partnership and our commitment to bring more people into private market investing , you can participate in Fuel's SEIS fund from £2,000, down from the typical entry point of £20,000. 📈 We continue to work with the best SEIS fund managers in the UK. SEIS funds are part of the government-backed SEIS scheme. This means they offer a generous 50% income tax relief on investments up to £200,000 and 0% capital gains. Please note that the tax benefits of SEIS depend on the individual circumstances of each investor and may be subject to change in future. The waitlist to invest is now open and you can follow the link in the comments to register. 😎

I spoke to three others, all partners at established firms, who have recently left their lucrative jobs to raise a #firsttimefund—despite 2024 being the most unforgiving #LPfundraisinglandscape in the last decade.  All asked to keep their plans confidential because of #regulations that limit how #privatefunds can be #advertised. Leaving a #wellestablishedfirm to #launch an #upstartfund is daunting in the best of times. Not only does it typically come with a #shorttermsalary cut, it also means #toughconversations with both #founders and #LPs, often with no guarantee that your #oldfirm will sign off on your #investmenttrackrecord. But increasingly, #seedinvestors are buying into the #tradeoff because they want the #upside: they’re taking more #financialinstability in the short run and betting that it’ll #payoff in the next #bullrun. https://lnkd.in/ebK7ixPr

Unpopular thought for founders but you can’t make any idea “more appealing to investors”. Especially VC’s. Institutional investors (VC’s) are custodians of funds from THEIR investors; LP’s. Limited partners in a fund more commonly referred to as LP’s are generally how funds are put together. VC’s then have a duty to invest in the BEST businesses to return multiples of that fund over ~10 years. Meaning businesses that can do this in 5-7 years to help them raise the next fund. This means they need to find businesses that will move the needle quickly enough to either be invested in by later stage players or have a liquitidity event that pays back. That’s what they mean by BEST. Angels run differently and are based on their interests, which is why they tend to be better options at earlier stages. But if you can’t make the maths of your business model scale to 100M ARR even in theory…it just isn’t a venture compatible business. Doesn’t mean you can’t make a great business, but VC’s need to articulate the glimmer of greatness that sees the investment into your business return the ENTIRE fund if not double to 10x return it. So yeah, they need traction to build conviction, but even with the greatest conviction in the best founders. If the business can’t articulate revenue growth potential to 100M ARR (not an actual plan but how you could achieve it that isn’t “Everyone will buy it” or “we only need to get 1% of this huge market to win”), then it’s not for the Venture lane and you can’t make it change. So when you hear VC’s saying they are chasing the Best, they mean the best for their use case. Race you’re own race, focus on quality over quantity when looking at investors. Otherwise you’re just burning your runway when you should be building, selling, and perfecting your ICP. #fundraising #VC #founderjourney

New year, new SEIS fund!! To kickstart 2024, we've teamed up with early stage investor Fuel Ventures 🚀 to help further democratise access to SEIS investing and to provide retail investors with tax-efficient diversification in early-stage businesses. Fuel’s mission is to back disruptive and ambitious founders. It has an established track record and across all its funds, as at May 2023, had deployed £130 million+ into over 100 companies. Notable recent exits include ContentCal to Adobe and Capdesk to Carta. Now, thanks to this partnership, you can invest in Fuel's SEIS fund from £2,000, down from the typical £20,000. 📈 SEIS funds are part of the government-backed SEIS scheme. This means they offer a generous 50% income tax relief on investments up to £200,000 and 0% capital gains. Please note that the tax benefits of SEIS depend on the individual circumstances of each investor and may be subject to change in future. The waitlist to invest is now open 👉🏻 https://bit.ly/41Xm9DW 

Announcing NVP 17, our newest $3B venture and growth equity fund! With the new fund, our team will continue to collaborate with visionary entrepreneurs and best-in-class founding teams to build the world’s most innovative companies. 🏆 We know a winner when we see one. Over the last 60 years, we’ve invested in more than 700 companies spanning a diverse set of sectors and stages. From minority to majority investments, we’re always looking to partner with growing, capital-efficient businesses, wherever they might be. 💡 Our world-class team is committed to funding the next category-defining companies. Our people, who lead with integrity and passion every day, are what sets Norwest apart. 📈 Since raising NVP 16, the previous $3B fund, our team has made 69 new investments and helped 36 portfolio companies achieve liquidity including Five-Star Business Finance Limited , Spiff (Acquired by Salesforce), Junk King Franchise Systems (acquired by Neighborly®), and more. We’ve also expanded the focus of our healthcare practice to include therapeutics and biotech. 🌲 From our deep operating experience and entrepreneurial backgrounds, we know how great companies are built — and that challenging times provide fertile ground for next-generation businesses. Many thanks to all who have played a part in our shared success. Our deepest gratitude extends to the outstanding entrepreneurs within our portfolio who have entrusted us to join them on the journey of building high-impact companies. https://nvp.co/nvp17

https://lnkd.in/gHqkAM8h Startup Studio portfolio VC fund. $8.5 mil. with room to oversubscribe. All deals warehoused and ready to allocate. Built in equity on day 1. Low 1 time management fee. $35k minimum investment. 506c offering, accredited investors only. GP's are personally invested. Multi tiered exit strategy in place. Liquidity options built in. *** This presentation of Sidecar Portfolio Fund (the “Company”) is for information only and shall not constitute an offer to buy, sell, issue or subscribe for, or the solicitation of an offer to buy, sell or issue, or subscribe for any securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.***

“One of the hardest questions I’ve had to answer is whether to distribute or to hold and maintain.” Roger Ehrenberg has done a fantastic job of generating DPI for his LPs and even he finds it hard! For this post, I’m going to focus on how Roger has generated liquidity in the form of a mini case study on The Trade Desk. -- The Trade Desk (TTD) started in 2009, which couldn’t have been a worse time in the market for ad tech and given the hangover from the global financial crisis. But Roger and the team at IA were extremely confident in the founders and believed they were on the right track, executing well with a truly differentiated approach. Ad tech was out of vogue and it was a bad time in the markets, making it tough for TTD to attract new investors. IA stepped up and put more money in two bridge rounds. They ended up investing $2.2M out of their $50M Fund I in the company before its Series A. TTD was ultimately able to raise their Series A in 2011. When they went out for their Series B in 2014, Roger was able to recycle $3M in proceeds from a recent acquisition in their portfolio into that round. At this point, IA had invested over 10% of its committed capital in Fund I into TTD. TTD announced its Series C in Mar 2016 and went public 9 months later. On the S-1 filing, IA Ventures owned nearly 20% of the company. This is way more than 95%+ of seed firms have when they enter a company! IA was obviously locked up, but had demand registration rights. They sold shares post-IPO via two demand registrations at an average exit value of $2.2B. Their $5.2M total investment in TTD turned into $250M - $300M of net DPI to their LPs and alone made IA Ventures I a 5x-6x net fund in less than 10 years. TTD today has a market cap of $48B. Does Roger regret selling so early? Not at all. He says: “We’re not paid to be public market investors.” IA locked in a top decile fund both from a DPI AND IRR perspective and he would make the same decision all over again. — Going forward, Roger acknowledges that the bar for IPOs has been raised meaningfully higher and strategic M&A is getting much harder to do from a regulatory perspective. He believes that liquidity will be primarily driven by private equity firms and continuation funds in our current market, both of which have far lower valuation ceilings. Firms will increasingly have to take some money off the table via secondaries in later stage rounds, something that Roger sees Fred Wilson (who he frequently refers to as his biggest VC mentor) doing a great job of. — With all of the success in Fund I and II, Roger and the team at IA have had their pick of the LP litter. In my next (and final post), I’ll share the criteria Roger uses to evaluate which LPs are the best fit for IA. Stay tuned!

Secondaries funds hit a low point in 2023, but is a rebound afoot? In the evolving landscape of venture capital (VC) secondaries, Hamilton Lane's strategic move to target a $5 billion fund for its sixth secondary fund has sparked significant interest. This initiative reflects a growing confidence in the VC secondaries market, driven by the need for liquidity solutions and portfolio diversification. As Matt Pellini, Hamilton Lane's managing director, highlights, there's a substantial appetite among Limited Partners (LPs) for secondaries, a shift from a decade ago when the concept required more explanation. The appeal of VC secondaries has expanded due to various factors, including the availability of a broader range of assets and an increased understanding of the benefits these transactions offer. The market dynamics have also evolved, with both family offices and large institutions looking for liquidity amidst a backdrop of delayed exits and distributions. Interestingly, the market for secondary transactions has seen fluctuations, with early 2023 witnessing nearly frozen venture asset markets and the widest discounts ever. However, a rebound in the latter half of the year signaled a stabilization in macro conditions and pricing, reinvigorating the GP-led transactions space. Pellini's insights suggest an anticipated uptick in deal activity, notwithstanding the challenges in matching buyers with the volume of deals available. This dive into Hamilton Lane's approach and the broader VC secondaries market offers a fascinating look at how liquidity needs, market dynamics, and investor strategies are intersecting in today's financial landscape. As we look forward to more developments, the conversation around VC secondaries is bound to deepen, with implications for investors, startups, and the broader ecosystem. - Link in comments. - Feel free to engage in the conversation and share your insights :) #VentureCapital #SecondariesMarket #InvestmentTrends #LiquiditySolutions #HamiltonLane