The changing nature of venture capital

TechCrunch | 6/25/2019 | Staff
vegdancer18 (Posted by) Level 3
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Paul Asel is managing partner of NGP Capital and a global technology investor for more than 25 years.

SoftBank and Andreesen Horowitz (a16z) recently announced new funds that reinforce the increasing scale of the venture industry. SoftBank announced its intent to raise a second Vision Fund through a public offering, a first for any venture firm. A16z announced two new funds, an early-stage $750 million fund and a growth-stage $2 billion fund.

A16z - Firm - Family - Funds - Months

A16z is the latest firm to launch a family of funds, four in the past 18 months totaling $3.5 billion, including the earlier announced Bio and Crypto funds. A16z joins GGV, Lightspeed and Sequoia as firms that have raised families of funds that cover specific sectors, stages or countries. In the last 18 months, Sequoia has raised nine funds, with nearly $9 billion committed; Lightspeed four funds for nearly $3 billion; and GGV four funds with $1.8 billion.

These funds and others like them will change the nature of venture capital. Venture is no longer a cottage industry where partners sit around a conference table on Mondays meeting companies and discussing which to support. Venture no longer operates as a collection of individual practitioners like a dental clinic. Venture firms are moving from job shops to scaled organizations with an armada of specialists in human resources, marketing, finance, engineering, legal and investor relations to support their investment and fundraising activity. Once firms with just a few partners, SoftBank, Sequoia and GGV now have teams of hundreds of people working to support continual fund raising, origination and portfolio development in the United States and abroad.

Startups - Business

Funding startups is an inherently local business.

Investment banking and private equity firms provide a road map for how the venture capital may develop. The leading investment banks and private equity firms were closely held partnerships for many decades,...
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