The coronavirus-driven economic uncertainty is nothing like other downturns the venture capital community has weathered before, several investors told Business Insider.
Some investors are concerned that limited partners will scale back investments, especially family offices and individually wealthy backers.
Others like Coefficient Capital have recently announced debut funds even as the uncertainty drags on. The fund was closed above its target near the end of 2019, the cofounders told Business Insider.
Several others, however, have had to postpone plans to raise new funds and use currently available investments to support current portfolio companies instead of pursuing new deals.
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Startups aren’t the only ones worried about future investors.
Venture capitalists, too, are starting to grapple with the new economic reality they find themselves in as the uncertainty around statewide shutdowns and work from home mandates halt the in-person networking the industry itself is built on.
Just as startups raise funding rounds from VC firms, those firms raise their funds from limited partners, typically referred to as LPs. These are the large institutional investors like university endowments and family wealth offices, that have the ability to make long-term investments in firms’ funds themselves.
But some …read more
Source:: Businessinsider – Technology