PodcastsThe Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch20VC: NEW FORMAT: Harry Stebbings on Why Seed Pricing is as High as Ever, Why Series A is the Best Place to Invest Today, Why Growth Founders Need to Reshape Expectations, Why M&A Windows Remain Shut and When Will IPO Windows Crack Open

20VC: NEW FORMAT: Harry Stebbings on Why Seed Pricing is as High as Ever, Why Series A is the Best Place to Invest Today, Why Growth Founders Need to Reshape Expectations, Why M&A Windows Remain Shut and When Will IPO Windows Crack Open
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The PitchFri Oct 20 2023
LP Fund Investing:
- LPs remain open for business despite what is being said on Twitter
- Trusted relationships are key to raising a new fund
- Building an LP acquisition flywheel helps increase chances of raising a new fund
- DPI (cash back) and differentiation in terms of model are important factors for success
Seed Investing Landscape:
- Seed pricing remains high and unchanged
- Multistage funds are more active in seed investing than ever before
- Seed market will continue to evolve over the next 6 to 12 months
Series A + B Investing:
- Series A is considered the best risk/reward insertion point in venture today
- Competition at Series A and B has decreased due to multistage funds focusing more on seed investments
- There are hidden aspects about this stage of the market that many people do not see or know
Growth Deals and Expectations:
- Two core elements needed to raise a growth round today: solid AI story and reduced expectations on price
- Growth round valuations have been impacted over the last 12 months, founders need to adjust their expectations accordingly
M&A Markets:
- M&A markets have dried up with low levels of activity expected to continue
- Small scale acquisitions are unlikely due to time constraints and lack of interest in adding headcount
- Acquisitions worth a billion dollars or more face increased regulatory challenges
IPO Markets:
- Klaviyo, Arm, and Instacart were not enough to crack open IPO markets en masse
- The IPO window may crack open in H2 2024 or Q1 2025 with companies like Stripe, Databricks, and SpaceX potentially going public
Secondary Markets for Liquidity:
- Secondary markets offer opportunities for liquidity for funds, LPs, and employees looking for exits or cash out options
- The spread between demand side bids and supply side prices is reducing, making secondary positions attractive
AI Landscape:
- AI will create significant opportunities, but most investments in AI startups will fail
- Access to proprietary data is the most important differentiator in AI
- Value accrues to incumbents leveraging existing distribution and startups providing tools for new product paradigms