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Predictors Of The Fundraising Market
- bravura 14y agoAs a data scientist, of course I am drawn to this sort of analysis. But is the size of the fundraising market really the appriopriate target variable? The amount of VC that can be raised is a useful number, because companies always want to be able extend their runway. But isn't this figure ultimately a proxy for numbers that are more broadly applicable? Such as: Will your company's growth accelerate or decelerate? What is the amount of "value" being created by tech? How likely are you to make money as a tech investor? (Admittedly, some of these are very difficult to measure, and there are a lot of confounding factors.) I'm curious if other people have ideas about what is useful to predict, in terms of the economics of tech.
- joncooper 14y agoInteresting. Totally makes sense when you think about it. Asset allocation among the LP set tends to be backward-looking, so if we believe exiting via IPO = high fund IRR, we should expect fund flows into VC. Similarly if we assume that M&A exits are less profitable (especially, less likely to move the needle on a particular fund's IRR) we should expect to see pressure on the VC to reinvest that capital and take another swing of the bat.