This Week in Startups

Venture Fund Size Growth, the Rise of Unicorns, and more with Elizabeth Yin and Zach Coelius | E1886

Jan 26, 2024

01:19:45

Snipd AI

Elizabeth Yin, a venture capitalist and co-founder of a startup accelerator and Zach Coelius, a successful entrepreneur and angel investor, join host David Weisburd to discuss trends in venture capital. They cover topics such as the growth of fund sizes, the resurgence of the Bay Area, the decrease in capital efficiency, the rise in unicorn companies but lack of liquidity, and top recent investments.

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Quick takeaways

The majority of unicorn companies remain private, resulting in limited liquidity for investors.

The San Francisco Bay Area's network effect and concentration of industry expertise are highly valuable for startup growth.

The influx of capital into late-stage pre-IPO companies has led to inflated valuations and reduced capital efficiency.

Deep dives

Changing Landscape of Venture Capital Funds

The venture capital landscape has significantly evolved in recent years. While the number of unicorns has increased, liquidity has decreased, with 93% of unicorns remaining private. Larger funds, driven by the desire to maximize management fees, have flooded late-stage companies, resulting in inflated valuations. This has led to a decline in capital efficiency, especially among enterprise companies. However, there is optimism for the future as a new wave of capital-efficient startups emerges. These startups, born out of the ZERP era, understand the importance of being resilient, resourceful, and not solely reliant on fundraising. As the market grows and more capital becomes available, these startups will be well-positioned to scale effectively and achieve success.

Introduction

3min

Challenges in Raising Venture Capital Funds Amidst a Drop in Investment

4min

LP Challenges, Fundraising Dynamics, and the Performance of Small vs Large Funds

5min

The Dynamics of Raising Larger Funds for Venture Capital Firms

14min

Startup filtering and the importance of networks

6min

Startup Success and Remote Work

11min

Crypto Companies, Building a Great Team, and the Liquidity of Unicorn Companies

2min

Venture Fund Size Growth and Over Acceleration of Capital

28min

Introducing Founder Fridays: A Meetup Program for Founders

6min

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Today’s show: David Weisburd hosts Elizabeth Yin, Zach Coelius, and Jason Calacanis to discuss trends in venture capital, including the growth of fund sizes (2:32), the resurgence of the Bay Area (33:42), the decrease in capital efficiency (51:12), the rise in unicorn companies but lack of liquidity (45:11), and top recent investments (57:27)!

Timestamps:

(0:00) David Weisburd hosts Elizabeth Yin, Zach Coelius, and Jason Calacanis to dive into the state of venture funds

(2:32) Venture funds are growing in size despite the slow market

(10:37) Squarespace - Use offer code TWIST to save 10% off your first purchase of a website or domain at https://Squarespace.com/twist

(11:43) Exploring the performance: smaller funds vs. larger funds

(28:56) Northwest Registered Agent - Get a 60% discount on your next LLC at - https://www.northwestregisteredagent.com/twist

(29:49) Hustle Fund’s quantitative approach to evaluating startups

(33:42) Is the Bay Area officially back?

(43:51) LinkedIn Jobs - Post your first job for free at https://linkedin.com/twist

(45:11) Number of unicorns has increased but liquidity has decreased

(51:12) The decline in capital efficiency over the past decade

(57:27) Rapid-fire segment on top recent investments