The folks at Collaborative Fund certainly like a challenge.
Oh, and they decided to raise their sixth flagship fund at a time when limited partners have grown more miserly.
Collaborative recently raised $125 million for its sixth flagship fund, the firm exclusively told TechCrunch, completing the process in just over 90 days.
“This fundraising environment is tougher than any I’ve seen since starting the firm well over a decade ago,” founder and managing partner Craig Shapiro told TechCrunch.
Part of that could be the fact that Collaborative has recently returned capital to its LPs, Shapiro said.
Cendana, Kline Hill have a fresh $105M to buy stakes in seed VC funds from LPs looking to sellIf you ask investors to name the biggest challenge for venture capital today, you’ll likely get a near-unanimous answer: lack of liquidity.
Cash-hungry venture investors, whether VCs themselves or their limited partners are increasingly looking to sell their illiquid positions to secondary buyers.
“We simply passed the hat around to our existing LPS at Kline Hill and Cendana,” said Kim.
It then passes these opportunities to Kline Hill, which values, underwrites and negotiates the transaction price.
Traditional secondary investors, such as Lexington Partners and Blackstone, recently raised their largest secondary funds ever.
But it’s unlikely that startups’ fundraising slog will become much easier soon, mostly because of venture capitalists’ own capital-gathering challenges.
In Q1, U.S. VC funds raised only $9.3 billion, according to PitchBook data.
At this pace, VC fundraising will end 2024 at just above $37 billion, the lowest capital raised since 2013 and a 54% decline from last year.
PitchBook estimates that dry powder, the amount of capital VCs still have to invest from previous funds, remains high.
“One low fundraising quarter is not going to make or break the future of VC,” said Kyle Stanford, lead venture capital analyst at PitchBook.
LACERA decreases venture capital allocation range, but experts say it doesn’t signal a trend Analysts say this is likely more of a one-off than a sign that LP interest in venture is waning.
The Los Angeles County Employees Retirement Association (LACERA) voted to decrease its allocation range to venture capital at a March 13 meeting.
The board of investments voted to decrease its allocation range to venture capital and growth equity from between 15% and 30% of the pension system’s private equity portfolio, to between 5% and 25%.
LACERA’s venture portfolio is currently 10.8% of the PE portfolio.
“They aren’t going to cut their venture allocation.
Emerging fund managers have had a tough time these past few years, and there is no telling when it will get better.
Her firm just closed a $23.4 million Fund II after two years of fundraising.
Wilkinson has no plans to raise a third fund anytime soon but has some advice for those who are, given the looming uncertainty in the venture market.
After 300 conversations with institutional LPs, I had an aha moment in which I realized that I did not want to primarily work with institutions in the future.
Individual investors are very different from institutional investors in all the right ways, in my opinion.
What is happening with all these new venture funds?
A growing number of venture firms may be uncorking champagne ahead of the New Year.
Today, a handful of investment firms announced new funds: Artis Ventures, BoxGroup, Playground Global and Singular all closed on funds, while Partech said it was launching a €360 million venture fund.
Steph Choo, a partner at the venture firm Portage, maintains that it’s still a “tough fundraising environment.” She thinks what we’re seeing is the result of continued interest in funds with strong track records and distributions to paid-in capital.
), which may drive renewed interest next year.”In the meantime, LPs may not be responding so much to what’s around the corner in 2024 but looking across the longer horizon, particularly given that venture funds typically invest across a 10-year period.
Venture capitalists are a special breed of investors. They not only write checks to fund startups, but they also act as fundraisers, persuasion forces behind their companies and the people…
