Capital Calls - Is That a Smart Fund?

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I feel like in the past three years, it's been about how many deals you cal get done and how you could deploy capital. The smart ones were the ones that still have like dry powder or whatever. I think the firms that that will come out of this sort of world in a better spot are the firms that looked around and said, even though the music's playing, i'm not participating. Y right?

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.