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Let’s get into today’s piece.
Today’s highlights
Vencap's CIO shares some data on which performs better
When venture became a sales game
Accolade's latest fund is bullish for crypto
How to be contrarian in VC
TOP
Growth > venture?
David Clark (CIO @ Vencap) recently shared some thoughts on the power law in early-stage venture compared to the power law in growth-stage investing.
It’s worth reading, and we’ve linked it here.
Here are the big takeaways:
Venture | Growth | |
|---|---|---|
% of portfolio returning < 1x | 60% | 43% |
% of portfolio returning 0 | 27% | 16% |
% of portfolio returning >10x | 5.5% | 5.3% |
% of portfolio returning 100% of the fund | 1.0% | 1.6% |
The TL;DR from the data: Venture funds have a higher loss ratio; growth funds have a higher proportion of fund returners than early-stage funds.
The second part of this is surprising although a) the difference is not significant, and b) it is a limited dataset. But still … surprising.
True venture investing is the definition of risk capital IMO. You operate largely on assumptions, there is no real data to go off of, and you are betting on people’s ability to operate.
Growth investing has real data, real trendlines, and although you are still largely betting on people, there is a real business (with numbers) to underwrite.
If you believe in risk-reward, you would expect the investing style with more risk to creates more outsized returners, but, at least according to this data from Vencap, that is not the case.
We’ll let everyone interpret this for themselves, but if you have any thoughts on the subject, we’d love to hear them.
Together with Hiive
“Secondaries have never been hotter” 👀
The secondaries market is on fire right now.
We know this because we read Hiive’s latest private market report.
These reports offer a window into pricing, liquidity, and momentum trends in the pre-IPO market, and they use real-time data derived from user indications and transactions on Hiive’s platform.
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LINKS
😎 Play It Cool—Chasing Heat vs. Being Contrarian in Venture Capital: Digital Native reminds us that venture is predicated on the power law…a small number of investments will drive most of the revenue
🎓 Universities Are Woefully Under-Resourced For AI Research: BigTechnology discusses how the universities are fighting to make academia relevant in AI
🕵️ How the Product Manager Role is Changing in 2025: Creator Economy interviews the CPO of Linktree who shares the counterintuitive skills needed in 2025
📖 Getting From Employee 5 to 50: Founder Resources brings the free hiring guide every startup should read
🎠 We Don’t Sell Saddles Here: Timeless article from the cofounder and CEO of Slack
TWEET
HEADLINES
Accolade Gathers $202 Million for New Blockchain Fund of Funds as Crypto Market Recovers (WSJ)
Redpoint alum Tonguz quickly closes $450m for Fund II (Venture Capital Journal)
These Smaller State Startup Scenes Saw Big Gains In 2024 (Crunchbase)
Cleo Capital launches cybersecurity accelerator to help undo the ‘crushing burden’ of online threats (TechCrunch)
Cardless swipes up $30 million to build a new generation of co-branded credit cards (TechCrunch)
Executive assistants, high salaries, and other ways early-stage founders will trigger a seed VC (TechCrunch)
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- Clay
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