Friday Letter

Women-led VC firms are on track to raise just two-thirds of the totals they raised in 2023 and 2022 as the broader venture industry struggles with a fundraising downturn.

An LP at this week's Women in Private Markets Summit North America says GPs need to understand the importance of managing reserves, especially in light of how dilutive new rounds of financing can be for companies that haven't yet broken out.

The fundraising downturn presents a rare opportunity for well-positioned LPs to take advantage of the pullback by many of their peers.

For the most part, domestic LPs are not keen to commit to homegrown funds, says Thomas Birch, a managing director at CDPQ.

Venture funds managed to raise just $15bn worldwide in Q1, a 53% decrease from about $32bn in the same quarter a year earlier.

The average fund size dropped to $115m in Q1 2024, its lowest point in about five years, according to new research from Venture Capital Journal.

Just how tough is it to raise a sophomore fund? OpenLP boldly predicts 'we could see up to 347 first-time managers exit the market' if success rates drop 5-15% from historical averages.

In just 12 months, Venture Capital Journal's list of climate-focused funds has grown to 44 funds that have raised a combined $9.5bn.

They make up just a small portion of the venture industry, but women who have managed to break into the business are thriving, judging by Venture Capital Journal's most popular stories this week.

Alaska Permanent, CalPERS and New Mexico SIC are more interested in growth equity since valuations have come down for growth-stage companies.