Megafunds

“With the new housing law pushing the mega funds out of single family buying, the small operators competition is about to thin out.”

“When 2009 came around, there was a set of very large funds. The market went into a nuclear winter, but those mega funds already had great fundraisers and they were going out and servicing clients and making sure that they knew what was going on and the global …”

“They've basically gone and they deploy fifteen million dollar checks almost as an option and a lead lead generation for the next run. And the strategy is obviously to have an index at the A of every single good A company and then double down on the ones that t…”

“We see many examples actually in mega funds of partners leaving the fund and the companies orphaned within the mega fund because their partner has left. And now they don't have a single person to advocate for them in any way, shape or form, and they're adrift.”

“I think we are going to see a more spin out. I do think there is a limit, but I do think you're going to see the, you're going to see these mega funds train again, more waves of investors. And these investors are going to realize that being a mid-level partner…”

“In today's world, if you have a big fund, I don't think that's where you should be focused. I think you should be focused on the absolute mega outcomes, the platform companies that are going to generate that disproportionate return, and you're actually going t…”

“The biggest venture funds in the planet are fundraising Better than they ever have. But it's almost as though there's two separate venture markets. There's the emerging manager, smaller fund market, and then there's the massive manager, mega fund market. One i…”

“If there's 50 investors if you come in and you're like the 23rd partner at like, I don't know, like Iconic or like one of these places like what companies do you get to cover? And so they, like that, that's the first problem is like you end up getting like a v…”

“To me, sometimes it just feels like a little bit of like it just feels like a different job than like the craft of venture capital where you're almost playing the lottery where you're like, okay, I have these 30 names that I own. I'm gonna try to do two of the…”

“In the market last year, I think around 350 venture funds raised, 75% of the money went to 25 funds.”

“Number one mega fund seed investor Was Andreessen with 72 seed deals, compared to number two was 27.”

“I know there is a meme which is the industry is gonna, is diverging into two camps. You either have the mega funds, the asset gatherers, or you have the tiny boutique shops. And I don't truly believe in that. I think there is a third way”

“The focus fund is better at hit rate, has more as a percentage, and lower as an absolute number than the guys cranking through 454 A's.”

“I mean, I think the biggest thing they have in their favor Is the fact that so many companies are staying private for longer, right? Which by definition means more need for capital, right? Which by definition means if you have that capital, you should be able …”

“The returns mightn't be three X venture returns, but you know, the competition is the small cap return of 11%. You know, if you're delivering high, mid, high teens, it may be that the LPs think that's great, and that's the bet they're taking.”

“If you have access to capital that's large and forgiving, which is what these mega funds have, then you should play the big balls game. Cause you're exactly right. You don't do it. You have to do less work. If it works great, you make out the same as Jason who…”

“You will see The institutional investors that have historically loved venture and participated in those big pools move down market, just like they did in buyout. All the ENFs left the mega funds between 2008 and 2012 for the most part. I think the same thing w…”

“Mega funds are all in the business of raising funds every two to three years. And can you stretch it to four? Sure. Right? And these are funds that get 40 to 50% of their revenue from fees”

“I think they're going to reflate at the end of next year. I think there will be a resurgence of mega funds in late 2024 and 20 25.”

“The salvage value and loss management really doesn't matter at those funds.”

“Like they have whole business models that are predicated on raising, you know, kind of spinning that black circle over and over and over. Other people's money, OPM, it's a hell of a drug. And so I think they've got to deploy that capital because it's a gating …”

“In fact, some of the things I'm looking at to invest in for my family office right now are actually a lot smaller. Then the mega funds, simply because the numbers are out of this world. I mean, they're producing incredible numbers.”

“I think the firms that are at risk or those are sort of in no man's land that are still continue to want to do diligence and feel their value add, but yet They're not investing at the early stage and they're competing against massive pools of capital with a ve…”

“One of the other things we love about private equity is if you can create food for that ecosystem, it's a risk, wash, repeat process of I buy something small and I sell it to the big guys.”