Raja Doddala (Churchill Asset Management) discusses historical exit data and venture return distribution across enterprise and consumer sectors.
Insight
Doddala: Pre-seed and seed funds perform best sized between $25M and $125M
“For seed and pre-seed, we've taken the approach of, we think smaller managers are better suited to invest in seed and pre-seed. We, you know, we have a long tail of 25, you know, ish firms in, in that and most of those we've added in the last sort of three yea…”
Disclosure
Churchill drops seed GPs who scale fund sizes past $125M to $150M
“And if you quote, scale beyond that size, you likely won't be part of our portfolio anymore. We think, you know, especially seed and pre-seed is sort of a boutique business, and we don't think it should scale to hundreds of millions of dollars. So if you end u…”
Prediction Open · timeframe Jul 2029
Doddala: 60% of 2021-2022 unicorns will probably never realize their valuations
“I think, 60% of the unicorns that were marked up in, you know, in our 20, 21, 20, 22, Are probably not going to ever realize their markups.”
Assertion Contradicted
Doddala: Only about 300 US public companies are currently worth over $1B
“If you look at all the public companies in the US today companies that are worth more than a billion is about 300 companies.”
Insight
Doddala: $50M seed funds only need $220M in total outcomes for 3x net
“If you're a fifty million dollar seed fund, to do a three X, you have to produce a total of maybe two hundred and twenty million in total outcomes. There's a number of ways to do that, and they have a lot more optionality. In their outcomes than a large fund.”
Insight
Doddala: VC managers need 8 to 10 years to outgrow emerging manager status
“In our opinion, it's less about how many funds you've had, but we think it takes about, you know, eight to 10 years for your portfolio strategy to sort of settle into one that really designed to take advantage of whatever your strengths are as a manager. And t…”