This Week in Startups

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

Jan 26, 2024

Elizabeth Yin, Co-founder of Hustle Fund, and Zach Coelius, Managing Partner of Coelius Capital, delve into the vibrant world of venture capital. They discuss the surprising growth of fund sizes even amid a sluggish market and highlight the 'flight to quality' trend among limited partners. The conversation reveals the challenges of larger funds in securing high-quality deals, the rising unicorn phenomenon, and the critical importance of a strong team in startup success. Fresh insights into current investment strategies provide a captivating overview for aspiring entrepreneurs.

01:19:45

Creator website

Episode guests

Jason Calacanis

Elizabeth Yin

Zach Coelius

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Episode notes

Podcast summary created with Snipd AI

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.

Intro

4min

Navigating the Current Landscape of Venture Capital Fundraising

3min

Navigating Venture Capital Challenges in a Volatile Market

4min

Analyzing the Performance of Small vs. Large Venture Funds

2min

The Dynamics of Venture Capital Funds

14min

Evaluating Startup Opportunities: Insights and Strategies

5min

The Changing Face of Startup Investment

12min

Building Teams and Unicorn Trends in Startups

2min

Trends and Challenges in Venture Capital

17min

10.

Innovative Startups Revolutionizing Industries

9min

11.

Coordinating Community: The Potential of Founder Fridays

4min

12.

Connecting Founders: The Launch of Founder Fridays

4min

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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