INSUBCONTINENT EXCLUSIVE:
I was in SF last week and met with more than a dozen VCs over the course of two days
This was post the holidays, post their visits to the ski chalets in Tahoe and the island beaches, and in the smack dab of one of the most
fundraises for the new year.And the one constant refrain I heard over and over again across these conversations was just this: VCs are
tired.The reasons were similar if not perfectly overlapping
The biggest driver was the sheer flood of venture dollars targeting too few deals in the Valley these days
consumer investing in modern memory), forcing everyone to chase the same set of SaaS companies.VCs described to me how the top deals start
and close their fundraises in 48-72 hours
Several VCs groused that dozens of firms now descend like hawks on the unwitting but fortunate target startup, angling for a term sheet and
willing to give up valuation and preferences left and right for any chance at the cap table
Earlier investors are just as desperate to own that equity, and no longer play any sort of honest broker role that they might have in the
And so they will take that one last meeting, and then one more last meeting, hoping to find some meaningful edge against the competition.And
so VCs are running ragged around South Park, and increasingly, flying around the world scouring for any alpha wherever they can find it
They are staffing up, trying to hire more raw talent in the hopes of finding that last undiscovered company
They scour their own portfolios and probe their founders, trying to find a tip to a deal that their competitor may have missed
hear from seed investors, who constantly had to churn through dozens of under-hearted startups to find the gold
The challenge is that relationships are being forged in the most intense of sale processes, and that means that founders may only have a
short period of time to work with a partner before committing a board seat to that individual
Personalities are hard to judge in such a crucible.As are the numbers
remorse from VCs (and very occasionally founders) that can lead to a botched round along the way.Lack of bandwidth, hyper-velocity, a
Email a VC an hour before or after and it may well change the result of a fundraise
VCs once had a reputation for plodding and slow deliberation
That old normal is definitely dead right now, and in its place is a new, modern VC who is going to determine millions of dollars in a few
and 2020 vintage years are going to look like eight-10 years from now.
