The venture capital world is often focused on the constant chase for growth and success, but according to Notable Capital’s managing partner Hans Tung, there is still value in the often stigmatized “down round”. While some investors may shy away from this term, Tung sees potential and opportunity within these types of investments. As the managing partner of Notable Capital (previously known as GGV Capital), a venture firm with a global reach, Tung has witnessed the ups and downs of the industry, and shares his perspectives and insights on the state of venture capital.
“An IPO is actually just a milestone, not the end game,” Tung explains in an interview with TechCrunch’s Equity podcast. “An IPO is the beginning of public investors being along for the ride. So when you think in longer-term valuations, up or down temporarily doesn’t matter as much as generating a big outcome at the end.”
This viewpoint is supported by PitchBook data, which shows that by September 2023, around 11% of the year’s VC deals were down rounds. Tung believes that the bigger picture and long-term goals should be the focus, rather than temporary market fluctuations or short-term valuations.
Aside from his views on down rounds, Tung also shares his optimism for the fintech sector and explains the specific areas within fintech that have him excited for the future. He also delves into recent changes at his own firm, which went through a transformation and rebranding to Notable Capital and Granite Asia. This transformation is just one example of the continuously evolving landscape of venture capital, with other notable firms like Founders Fund, Benchmark, and Thrive Capital experiencing significant personnel changes.
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