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This Week in Startups cover image

Monique Woodard, Fund of Funds Panel & The Pro-Rata Yacht! | E2018

This Week in Startups

NOTE

Unlocking Value in Emerging Manager Funds

The focus on small sub $60 million emerging manager funds presents significant opportunities that remain largely overlooked in the venture capital landscape. These funds have outperformed the market over the past 15 years, particularly as they are often linked to early investments in unicorn companies. A staggering 92% of unicorns had an emerging manager or angel investor at the seed stage, yet less than 5% of these managers usually invest beyond the initial seed round. This indicates a substantial amount of untapped value—over $150 billion—that emerged from these investments. To capitalize on this potential, strategies that allocate a significant portion of capital to emerging managers can maximize returns. Specifically, allocating 25% of capital to support small emerging managers while reserving 75% for an opportunity fund enables these managers to reinvest in their best-performing companies. Such a strategic approach leverages the proven track record of emerging managers to unlock hidden value in the venture capital ecosystem.

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