May 1, 2017 · 27m · 20vc
20VC: Explosion of First Time Funds, Only 1 Mega Fund Raised: What The Heck Happened in Q1 Venture Markets with Beezer Clarkson, Managing Director @ Sapphire Ventures
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gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions
In this episode of The 20 Minute VC, host Harry Stebbings speaks with Beezer Clarkson, Managing Director at Sapphire Ventures, to analyze Q1 venture capital market trends, fund deployment metrics, and LP investment strategies. They explore the rise of first-time funds, public market exit dynamics, and key lessons from building venture brands across global markets.
How this conversation actually went
Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. Harry holds 46.1% of the talking time here. How this is scored →
Harry as informed peer 5.2 Guest teaching 3.5 Guest disagreement 0.8 Harry pushing back 1.7
speaking balance: gold is Harry, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 13:33 Gently challenging premise of explosive growth
Beezer reframes Harry's excited premise about explosive fund growth, correcting it to simply a return to historical baseline norms.
Hardest push from Harry ▶ 17:33 Challenging private market valuation sustainabilityHarry pushes on whether recent late-stage private market pricing was fundamentally unsustainable when benchmarked against public market realities.
Biggest teaching moment ▶ 10:58 Explaining GP bandwidth and deployment pacing limitsBeezer educates Harry on why truncated 18-month deployment cycles strain GP capacity and why LPs advocate for three-year investment windows.
Harry holds his own ▶ 20:48 Harry detailing strategic advice for entering VCHarry showcases deep industry knowledge by outlining domain focus, Quora versus Snapchat platform longevity, and network building strategies.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | Harry as informed peer | Guest teaching | Guest disagreement | Harry pushing back | Why |
|---|---|---|---|---|---|---|
| Welcome Beezer Clarkson & Sapphire Ventures Overview | 5 | 4 | 1 | 2 | Harry introduces the episode and demonstrates background knowledge by citing the Upfront survey regarding LP concerns about fundraising cadence. Beezer outlines Q1 fundraising statistics from PitchBook and explains why early-year numbers can be misleading. | |
| Surge in First-Time Funds and LP Evaluation Dynamics | 6 | 5 | 1 | 2 | Harry references investor Chris Douvos and asks about shortened 18-month fund lifecycles versus paper markups. Beezer explains why LPs prefer three-year deployment cycles due to GP bandwidth and vintage diversification. | |
| Normalization of Mid-Sized Funds and Annual Projections | 4 | 4 | 1 | 2 | Harry asks if the volume of mid-sized fund raises is sustainable amidst macroeconomic uncertainty. Beezer clarifies that current activity represents a return to historical norms rather than explosive growth. | |
| IPO Market Reactivation and Public vs. Private Valuation Deltas | 5 | 4 | 1 | 3 | Harry directly probes whether private IPO valuations were unsustainably high compared to public markets. Beezer agrees and notes that crossover investors pulled back as a result. | |
| Quickfire Segment: LP Optimism, Conviction, and Bubble Risks | 3 | 3 | 1 | 1 | Harry runs through standard quickfire questions about LP optimism, conviction, and market risks. Beezer notes the risk of non-disciplined investors pricing up rounds and creating a bubble. | |
| Reverse Interview: Beezer Interviews Harry Stebbings | 8 | 1 | 0 | 0 | Beezer turns the tables and interviews Harry, who displays deep industry expertise regarding VC branding, European tech talent metrics, and AR versus VR investment thesis. Harry articulates comprehensive answers, drawing on insights from over 800 interviews. |
Statements from this episode (15)
Clarkson: US VC funds raised $7B across 51 funds in Q1 2017
“By our count, there's been almost seven billion dollars raised, and these are all U.S. Numbers, by 51 funds, and about 50 and a half billion raised by venture-backed companies.”
Clarkson: Mithril II was the sole VC mega fund raised in Q1 2017
“Q one of this year only saw one mega fund raise. So props to Mithril two, which raised an eight hundred and fifty million dollar fund, but they're the only one.”
Clarkson: 2017 VC mega fund count won't match 2016 levels
“While we predict there will definitely be more coming this year, we don't think there'll be the same numbers last year by any stretch.”
Clarkson: 17 first-time VC funds raised in Q1 2017 versus 6 in Q1 2016
“So, there are more first-time funds this year than last year by more than double. So, last year, there were six during QI of 2016, and this year so far, there's been 17.”
Clarkson: Q1 2017 first-time VC funds averaged $100M in size
“You know this, the fund sizes are healthy too, so averages are a bit deceiving, but you know, for what it's worth, the average for these 17 funds was a hundred million, and that wasn't just because there was like one ginormous one and the rest were dinky. Ther…”
Clarkson: VC funds should maintain at least a three-year investment horizon
“We're advocates of a three-year, at least, investing term for a couple of reasons. One is time differentiation in your portfolio. If, say, for example, the 18 months you were investing was 14 and 15, you would have had a lot of big, heady valuations going on, …”
Clarkson: 15 mid-sized VC funds raised in Q1 2017 versus 8 in Q1 2016
“So this year we've had 15 of that sort of bucket size of funds raised versus eight of last year.”
Clarkson: US VC fundraising in 2017 will not match 2016's $40B total
“I have a hard time believing that we're going to raise as much money this year as we did last year, and that's a gimme, right?”
Clarkson: $40 billion raised in VC in 2016 following two $30B years
“Forty billion was raised last year, which is just an incredibly large number, and that was on the back of two other years where average of thirty billion was raised per year, so that's just a lot of money.”
Clarkson: Q1 2017 Tech IPOs Raised Nearly $28B Across Three Listings
“We had 14 total during the year, 9.6 billion raised this in Q one, right? Cause Q two isn't done yet. Q one, we had three IPOs, but it shows you what an IPO can do because of the size of some of the IPOs you had almost twenty eight billion raised.”
Clarkson: Private Multiples Exceeded Public Multiples in 2015-2016, Repelling Crossover Lenders
“Well, certainly the multiples paid in the private markets at one point in time were exceeded that in the public markets, and that was cause for a lot of concern in the late 15 into 16, and you saw the crossover investors pulling back because of that, and you a…”
Stebbings: Creators should choose immortal content platforms over ephemeral ones like Snapchat
“And then just with the content, fundamental to choose immortal content platforms, so Snapchat for content isn't really great unless you're looking to create connections. It dies and is not searchable. The likes of Jason Lemkin have done incredibly well with Qu…”
Stebbings: Europe has 700,000 more engineers than the US
“We've got more engineers in Europe than the US by 700,000.”
Stebbings: VR is an isolating experience that detracts from social togetherness
“I joined Mitch Lasky at Benchmarks of the World in being very anti-VR. It's some of the very best innovations of the last decade have been those that fundamentally bring people together. And VR for me is an isolated experience that detracts from a feeling of s…”
Stebbings: Augmented reality will integrate into daily life via contact lenses
“AR on the other hand, being super interesting, essentially the ability to make us even more superhuman than the iPhone made us. So that I think is truly groundbreaking. And I expect real innovation in the form of integrated devices in the form of, especially l…”