That will be VC’s largest fundraising question in 2023
One of the most significant enterprise money trends of the past handful of years was early-stage firms raising “opportunity” cash to make observe-on investments into their most thriving bets. But amid a tougher fundraising marketplace that impacts both VCs and startups, muted exit environment and slowdown in late-stage funding, will that development continue on?
Previously this 7 days, TechCrunch very first noted that Lux Capital was boosting money. What stood out was the agency ditching its option fund and combining its early- and late-phase approaches into a single car or truck that will mostly focus on early-stage offer-creating. This came just months following Y Combinator announced it was pulling back from its late-phase technique way too.
At very first, I thought these were being just the first couple of indicators that 2023 would likely be the calendar year the possibility fund pattern dies, but of course, it is not that very simple.
I believe whether to increase an option fund will come to be a significantly additional debated query for companies on the lookout to raise dollars this yr. I imagine we will see substantially significantly less of them, but there will even now be companies raising them with very good purpose. Khosla Ventures and Canaan look to be among these: Again in January, Khosla started off fundraising for a slate of new cash, which includes an opportunity fund, and on Thursday, Canaan reported it experienced elevated $850 million across two funds, its flagship early-stage fund and a late-phase system, my colleague Connie Lozios documented.