Do We Not Like These Types of L Ps?

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A lot of the times it's considered, in crowley's taboo, to do so coka and most g ps are incredibly upset with an l p who sold out of them. It almost shows that they no longer have faith in them as investors, right? Right? So this is considered the sort of last resort,. i will say, just as the financialization of everything has happened, these things have moved in a way wherei might be a little bit more normalized today than it was before. Ah. That's exactly right. There are firms who are to helt there. Ro ll buy it. Now, all of a sudden that that mnator were were moving back in

Recently in the Lux Capital office, my colleague Chris Gates, the producer of the "Securities” podcast, along with biotech investor Shaq Vayda were talking about the global macro environment and venture capital. Tech stocks hit their zenith in November 2021, and now a lot of VCs have slowed down their investments over the last couple of months. That's led to something among limited partners and asset allocators known as the “denominator effect”, where portfolio managers move money from one asset class to another as each asset class performs relatively differently.

And so they talked about the denominator effect, they talked about a couple of other different patterns that they’re seeing in the venture world, and I figured that since it's summer, and it's July and we’ve already have talked about enough terrible news on the “Securities” podcast the last couple of weeks, I figured we could do something a little bit different, which is sort of a Venture 101 on the denominator effect, and talking about basically what we're seeing in the world today. So here's Shaq and Chris, take a listen.