The Ledger
Every statement that passed quotation and attribution checks. Mix any filter with any other: certainty 1/5, debate potential 5/5, or both at once.
why aren't all 70 resolved? a statement only gets an assessment when the public record can support or contradict it. opinions and what-ifs never can, and 0 checkable ones are still open, waiting for their date. predictions held up or didn't; assertions are supported or contradicted. on every card: ▮▮▮▮▮ certainty · ▮▮▮▮▮ debate potential. speakers are clickable
Clarkson: LPs are shifting to accept partial secondary sales of winners
“And I've heard LPs that used to say, hold on to all your winners all the time are now saying, well, I meant that. But in context, there are times when it could be useful.”
Clarkson: Absolute TVPI-to-DPI gap is likely largest since dot-com crash
“The only other time that would be equivalent would be about 99 and 2000, and I don't know if there is the volume of funds in the market then, so, and absolute numbers, he's probably right.”
Clarkson: LPs internally discount GP fund valuations by 20% to 25%
“Well, I know a lot of LPs that will ask their managers, and then go back home and take another 20 to 25% off the top, because there's things that nobody knows.”
Clarkson: Auditors urged venture GPs to coordinate valuations in late 2022
“Well, and then I heard stories, and this is a story, so put it under the rumor and hearsay bucket, but that last year, the end of twenty-twenty-two, when the auditors were getting involved, they were telling GPs to talk to each other to try to figure out how t…”
Clarkson: Multi-billion-dollar VC funds disconnect GP fees from actual returns
“If you have a fund that's, I don't know, many billions, you're going to have a number of GPs that are making significant dollars, assuming it's spent Not spent on platform and other things. But if you can make that kind of money without even returning the fund…”
Clarkson: The list of elite VC managers with unconditional LP backing is shrinking
“There are always going to be some managers that have that kind of LP pull that people will just keep working with. But I think that list is getting smaller, and I think the names are switching around.”
Clarkson: Growth equity mindset in early-stage funds fails long-term
“It's so clear in early stage, if you're not taking a big swing for the fence, which doesn't mean saying taking like ridiculous, I haven't thought about it risks, right? But you just have a lot of people that think that they can do sort of smaller investments, …”
Sapphire Partners: 3x venture funds require at least one 1x fund returner
“We've yet to see a fund that's returned three or more X that does not have a company that's returned at least one time the fund.”
Beezer Clarkson: LPs are continuing to make new venture commitments
“That's not true. I think LPs are being more selective and making new investments. I know we are, I know others that are, They're absolutely making new investments.”
Clarkson: LPs face liquidity strains from pulling forward future budgets
“A lot of LPs also pre-spent future budgets, if that makes any sense. If you were raising a fund every 18 months, and I thought you were raising every three years, I had two choices. Either I pull from future year budgets, or I reduce my check so that I stay co…”
Clarkson: Extended market downturn will force institutional LPs to sell holdings
“I think we're seeing some, the tip of the iceberg. And if the market doesn't come back, there could be a lot more. And that is when, to your point about When endowments and foundations and other LPs have to make some really hard choices about what they keep in…”
Clarkson: Sapphire underwrites Series A funds to 3x and Seed to 5x
“But on the math of it, we just underwrite a series A fund to a three X and C to a five X, and you just look at what the numbers line up at, and you say, okay, so given the ownership and given the AUM, what needs to be true to return the fund one time, half a t…”
Clarkson: Some Sapphire-backed emerging funds struggled to cover basic rent
“We've had some funds in our program where I'm a little worried they can't pay their rent.”
Clarkson: Strict GP commit requirements create unnecessary barriers for new managers
“To your point about GP commit, yes, it has been an unnecessary barrier to entry for too many GPs.”
Clarkson: Venture capital LPAs are overly complicated and useless
“It's so hard to read. It's so complicated. It's so not useful. It's supposed to be a tool to understand how our relationship works, and it's just a big legal pile of documents.”
Clarkson: Venture capital breakage between Fund I and Fund II averages 50%
“We've been looking at data going back to 1995. I was shocked at the breakage. The breakage between Fund One and Fund Two is not every year, but averages out to be about 50%.”
Clarkson: Only 17% of venture funds successfully reach Fund IV
“What was also sort of heartbreaking was the fund one to fund four on average, again, these are averages, some years are better, some years are worse, is 17%.”
Clarkson: VC firms are unstapling core and opportunity funds
“The other thing we're seeing in this market is people are unstapling their funds because a number of LPs felt dragged into it”
US VC Fundraising in 2016 Hit Highest Level Since 2001
“At the end of Q-three, we pulled some numbers, thanks to our friends at PitchBook, and there's been thirty-three billion raised by 157 funds. This is just in the U.S., And what's really interesting about this is we haven't seen this much money raised in one ye…”
Only 31 First-Time VC Funds Were Raised Through Q3 2016
“What I can say is, is through Q three, You know, we go through and we curate the data, we pull it from a number of sources, and then we curate it, because sometimes funds close one year and then do a final close a second year, so the numbers are a bit squishy,…”
Clarkson: LPs are not in the same risk-taking business as GPs
“Sometimes other folks forget that LPs are not in the same business of risk taking the way that GPs are.”
Clarkson: LPs must commit consistently because venture markets cannot be timed
“There is a very long history of looking at venture returns, which says if you're not in the market, you just don't know how to call the exit, so you have to be consistent about committing.”
Clarkson: LP and GP bull market investments were driven by momentum and FOMO
“I just think back when it was sort of this big run up in the, when we were in the bull market, it looked like there were a lot more nodes in areas that could be very productive, and people went for it because they didn't, there's a lot of FOMO, LPs and GPs ali…”
Clarkson: Institutional LPs re-up for Fund II because data requires Fund III
“So I think those institutional fund ones from day one will have a much easier time raising fund two, because most LPs have been in the venture business for a while, know that there is only so much you can show in two to three years of work. So barring somethin…”
Clarkson: Multi-billion-dollar funds exist because large LPs prioritize capital preservation
“There is a class of LPs that need to write very large checks. Those are vehicles that work for that fund size. We also have to understand, I mean, I know you get this, but it's, I think sometimes other folks forget that LPs are not in the same business of risk…”
Clarkson: Some LPs invest in funds primarily for direct co-investment checks
“Somebody who, when you call them and you say, why'd you invest in this fund, and they say, oh, I'm only here for the direct deals, I don't care about the return as much. It's not that it doesn't matter, it's just, they're not doing it for the fund return, they…”
Clarkson: Emerging VC managers rarely achieve persistent flywheel in fund one
“It's just very hard to do in your first fund cycle because there's just not enough time.”
Clarkson: Venture funds over $50M face trade-off between ownership and size
“I think we've yet to run the math and see a fund that's gone over fifty million that doesn't have to start having some trade-off between ownership and AUM.”
Beezer Clarkson: VC loss ratios were unusually low from 2020 to 2022
“One of the weird things about the market from the last, sorry, twenty-twenty to twenty-twenty-two, we did not, as an industry, have the loss ratios, even probably back earlier, that one would expect in venture.”
Clarkson: LPs See Venture Managers Value Identical Portfolio Companies Differently
“If you're an LP that has a, as a sort of existing book of venture business, and you've got it over different times, you will a hundred percent see that people will value their companies differently.”
Clarkson: Seed Managers Lose Direct Boardroom Access by Series B or C
“That disputes my theory, because a lot of times seed managers don't, they only might have information rights by the time a series B or C comes up, so they might not have all the information that someone in the boardroom has.”
Beezer Clarkson: LPs are asking VC managers to slow deployment
“I think there's been many conversations with LPs suggesting GPs slow their roll.”
Clarkson: LP Chief Investment Officer Average Tenure Is 3 to 5 Years
“Do you know the average CIO is like a Five year tenure. I did, I actually thought there were like, 15 years. But no, a friend of mine was like, oh no, it's three to five years.”
Clarkson: VC managers cannot generate 3x fund returns through company soft landings
“I'm having more conversations with more managers who are like, hey, we're just going to try to find some soft landing for these companies. It's just not going to work, which we've been expecting for years to my point about loss ratio. So that doesn't wildly su…”
Clarkson: I passed on Initialized Capital's first fund, which returned $390M
“So I passed on the initialized fund one because we had just launched, yes, I know. It was bad. But- Do you know, it made three hundred and ninety million.”
Clarkson: Far fewer venture funds achieve 10x returns than expected
“There's so many fewer of those than people thought.”
Beezer Clarkson: Delivering three or four consecutive strong DPI funds is world class
“I think the numbers will tell you if you ask different LPs, if you can get three or four funds in a row with strong DPI, that is world class.”
Clarkson: Venture Market Is at Bottom and Will Recover by 2024-2025
“I think we're bumping along the bottom. I think it should start coming up at some point. You know, I don't know if Jason's right, it's back half of 24, you're right, and it's 20, 25. At some point, it will come back up.”
Sapphire Partners Takes Over CalSTRS Early-Stage Venture Fund Mandate
“We announced this about two weeks ago that we've taken over the early stage venture fund mandate for CalSTRS and what this means. So for folks that aren't familiar with CalSTRS, they're the world's largest educator pension fund in the world, which is Pretty co…”
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: 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: 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: 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…”
Sub-$100M VC Funds Declined in 2016 While $500M+ Funds Surged
“Statistically, a much bigger year of more five hundred million dollar funds being raised in a decline of these sub one hundred million dollar funds. But this is coming on the back of a number of years of 30 billionish raises where you had a lot of micro funds …”
Venture Funds Exceeding $700M Lose Their Predominant Series A Focus
“One, since we're focusing on funds that are predominantly Series A exposure, many funds, when they get into the seven hundred billion dollar fund size, are not predominantly Series A. They're doing other stages.”