Equity Notable Capital's Hans Tung on the state of VC and the upside to down rounds
Apr 20, 2024
Hans Tung, managing partner at Notable Capital, shares his insights on the venture capital landscape and the often-misunderstood concept of down rounds. He argues that with a long-term mindset, down rounds can be strategic rather than detrimental. The conversation touches on the rise in startup shutdowns and how adapting to these challenges can lead to growth. Hans is particularly optimistic about the fintech sector, discussing its expansion compared to traditional finance and the recent personnel shifts within VC firms.
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Focus on Long-Term Value Creation
- Prioritize long-term outcomes over short-term valuation fluctuations.
- Focus on scaling the business and generating positive returns for investors.
Down Rounds vs. Shutdown
- Founders often choose to maintain valuations even when facing potential shutdown.
- Hans Tung advises against this, advocating for down rounds as a temporary adjustment.
Current Investment Landscape
- The current investment landscape mirrors late 2023, with AI being an overvalued outlier.
- Tung emphasizes the importance of strong fundamentals and cautions against sector comparisons.