Prediction Held up
Kohli: A tech startup M&A acquisition spree will not happen
“The appetite to Just do rapid set of acquisitions in this market. I don't think it's going to happen. And then in the private markets the key question that's going to come up is what price do you believe? Right? Meaning if you're a private company and you've r…”
Prediction Partly held up
Kohli predicts all 15-minute delivery startups will go bust
“A hundred percent. Because the cost of capital goes up. And when the cost of capital goes up, you can't invest into launching new cities. And you can't invest into what typically ends up being the J curve of this type of a business where you end up losing mone…”
Assertion Not checkable as stated
AngelList data shows more check-writers leads to more founders and innovation
“Is that when you have more VCs in the ecosystem, you actually do get more innovation, which I know is against what most VCs think, but we're actually seeing it play out in our data that when you have more people writing checks, you actually end up getting more…”
Prediction Held up
Kohli: Pre-seed and seed valuations will remain buoyed without major compression
“And so what you have is you have pre-seed and seed, they're buoyed. And we don't see that changing. We actually still see that staying the same and the valuation staying the same, maybe a little bit of compression, but we're not going to see it the same rate o…”
Assertion Contradicted
Kohli: Startups can no longer raise continuous seed extension rounds
“So what you, what was happening in the heyday of 20, 21 and 20, 22 was that companies would just keep raising these successive rounds and we would see it like C, C plus C plus plus, right. They just keep going on and on and on and always just raising a little …”
Assertion Partly supported
Kohli: Secondary Deals for LP Fund Positions Commonly Clear at 40-50% Discounts
“So one LP will purchase another LP's position and the range of discount that we're seeing actually is anywhere from. But what's more common Is actually 40% or 50% from last round mark. And so you're talking about a pretty significant discount to last round val…”
Prediction Held up
Kohli: Seed valuations will hold up better than late stage
“Pre-seed and seed, they're buoyed and we don't see that changing. We actually still see that staying the same and the valuation staying the same, maybe a little bit of compression, But we're not going to see at the same rate of series A, series B and onwards, …”
Assertion Partly supported
Startups can no longer raise successive leadless seed rounds
“So what you, what was happening in the heyday of 20, 21 and 20, 22 was that companies would just keep raising these successive rounds and we would see it like C, C plus C plus plus, right. It just keep going on and on and on and always just raising a little bi…”
Prediction Partly held up
Kohli: Pay-to-play startup rounds will accelerate through late 2023
“And so our view is that these will start ticking up in Q two and then definitely Q three, Q four, because these startups, they have a brick wall, right?”
Prediction Held up
Kohli: Market conditions do not support a rapid startup acquisition spree
“So I don't think the conditions are there for a rapid acquisition spree. Unless these are, like, rock bottom prices, and it's just like, you know, just, I mean, literally, you're getting an amazing deal, but I don't think that's gonna be good for employees or …”
Assertion Partly supported
Secondary VC fund positions are commonly selling at 40-50% discounts
“So one LP will purchase another LP's position and the range of discount that we're seeing actually is anywhere from. But what's more common Is actually 40% or 50% from last round mark. And so you're talking about a pretty significant discount to last round val…”
Assertion Supported
Assure collapsed after spending 6 to 10 years of prepaid SPV fees
“We saw Assure, which was an SPV provider effectively blow up completely. And they blew up in a spectacular fashion. They basically had took money in from all the SPVs that they were supposed to manage over six years or 10 years. And when they blew up, they're …”
Insight
Early-stage VCs cannot rely on executing pro-rata rights in breakout companies
“In reality, when you really are trying to invest your pro rata into the companies that are becoming really great, the assumption that it is going to be available for you is false.”
Assertion Not checkable as stated
Software market expansion to $10B outcomes justifies higher early-stage entry valuations
“Software markets are much larger than anyone thought. The billion dollar companies are now ten billion dollar companies. And so what that means is the entry valuations can actually be much higher than before.”
Prediction Didn’t hold up
AngelList expects to host a billion-dollar rolling fund very soon
“And we're actually seeing some rolling funds scale extremely quickly. And we do expect us to have the Equivalent of a billion dollar fund very, very soon under a rolling fund structure.”
Prediction Not checkable as stated
The next cohort of top founders will raise entirely from rolling funds
“That the next cohort of great founders are raising their entire pre-seed and seed round from rolling funds.”
Assertion Supported
AngelList data shows startup funding market experiencing largest drop ever recorded
“And so we're actually in the. The depth of the bear market, if you will, for venture right now, and that spread between where it was in the boom times and the bad times is the farthest distance it's ever been on, on everything that we track.”
Assertion Supported
Kohli: Series B deal volume and valuations are down over 50%
“I mean, you're talking about deal volume in Series B down more than 50%, valuations down more than 50% Series A is also down Series C is basically Gone, right? Like, I mean, you don't really hear of many late stage deals getting done anymore. It's very, it's r…”
Assertion Not checkable as stated
Kohli: Capital markets are closed to startups without credible traction
“What we're seeing in our data is that only the companies that Actually have credible traction are raising now. So even if you put aside adverse selection, meaning the set of companies are raising from insiders and insiders are leading the rounds that we're def…”
Assertion Supported
Kohli: Lead investors are not strictly necessary to close seed rounds
“So we're not seeing that lead investors are absolutely necessary for a round to get closed, especially at the pre-seed and seed stage, right?”
Assertion Not checkable as stated
Kohli: AngelList data shows 33% drop in startups raising capital
“And when you just take a look at that sample size of companies from today, sample size of companies in historical average, we're actually seeing a 33% drop in companies in terms of how many companies we expect would have raised by now, right? And so that's a p…”
Prediction Partly held up
Kohli: Distressed startup financings will surge in Q2 through Q4 2023
“And so what's happening is the cash out date was, has been pushed out for a lot of companies. And so our view is that these will start ticking up in Q two and then definitely Q three, Q four, because these startups, they have a brick wall, right?”
Assertion Not checkable as stated
Kohli: Individual LP commitments to venture funds fell 60% year-over-year
“When you compare it to venture funds the, and venture funds are the traditional structure and we have a pretty large venture fund business. Individuals are actually down 60% from like when we compare it to about a year ago.”
Assertion Not checkable as stated
Kohli: Large language models automated a good portion of AngelList operations
“And a lot of the large language models and their advancements there have had a major impact on AngelList, just our own internal operations, right? It's been huge. And we've been tinkering on it for many months now, and it's actually automated a good portion of…”
