Every year at Upfront we try to analyze the venture markets. We try to look at the sources of capital, the valuations, exits and trends. We use this try to draw some context that informs our funding decisions.
Of course we fund companies in good markets and bad. In venture our goal is to fund companies over a 10-year+ time horizon, which is the time it takes to build truly transformational companies. To do so we need entrepreneurs who can build companies that scale well in booming markets and also control costs appropriate in correcting markets.
We also are dependent on money, advice and support of many of our friends & colleagues in the venture industry who co-invest with us in nearly every deal we do.
Every year we try to write up and publish our thoughts publicly both to help other investors & entrepreneurs and also to test our thoughts in the public market of ideas. If people think we’re full of shit we certainly hear so right away if we say something stupid!
Our last thoughts on the VC funding markets heading into 2016 was published here and I followed up with a little more context on the resetting of the venture industry, some thoughts on how startups are valued and how to think about burn rates at startups.
For this year’s analysis we turned to our peers to gather their points-of-view on the state of the market. We figured this “wisdom of the crowds” would yield some insights. What it did is confirm that our intuition about the slow down of the market in Q415 was real, the situation is likely to get more challenging and many other startups were cutting costs (as many of ours has done in late 2015).
We promised that we would clean up the dataset and publish it to all of those who participated. We’re sending it directly to people’s email boxes but I figured we might as well make it public so you all have access to it. It’s linked to here where you can download it or embedded below. Up next I’ll publish all of the LP (people who invest in VCs) data we gathered and what we believe this signifies.
Some final notes:
- It was done 100% anonymously – even to us
- We did know the entirety of the people invited to participate and it was hand curated as a strong cross-section of mostly US VC firms and it was mostly investment partners in these firms
Here is the list of the groups participating
- I also want to acknowledge my gratitude for the work of our principal Kevin Zhang for helping me pull together data, building charts and debating with me what it meant. Without Kevin the work simply wouldn’t get done. So as a favor if you appreciate it maybe follow him on Twitter so can share more knowledge with you.
- I’d also like to acknowledge my partner Stuart Lander who helped me build Survey Monkey surveys and who read and critiqued my questions to be sure we were getting interesting information. If his follow count crosses 1,000 he promises to Tweet more often.
In short – this was a team effort. Thank you, guys.
(Cross-posted @ Both Sides of the Table)