Four Venture Trends to Watch From This Year’s RAISE Global Summit
RAISE has always provided LPs a view into the future of venture capital. New emerging fund formation, we believe, is a strong indicator of future investable trends. What’s a better indicator of bullishness than a fund entrepreneur betting their entire career to build a new investing platform?
And thus, there is much to learn about the future of VC just by reading RAISE fundraising decks every year.
For example, we saw Los Angeles blow up as a venture capital center one year, when 14 LA funds suddenly showed up at the conference. We saw AI emerge as a trend, with 11 new funds in one year. We also saw the beginning of the Bay Area diaspora, as many fund managers submitted decks from cities like Austin, Miami and Atlanta.
Of course, spotting trends isn’t just limited to which funds submit decks, but also which funds our 24-person Selection Committee picks to attend, based on their excitement about the underlying investment themes, as well as other factors like track record and experience.
Here are four trends we see emerging from this year’s 100 selected funds:
1. 2022 is the year of deep tech.
We saw more funds than ever this year focused on deep tech - and the LPs liked them. So many deep tech funds qualified that we formed two full panels of them! By contrast, we only have one panel dedicated to enterprise software and had a hard time even forming a consumer panel. Also, many software-focused firms that we would have classified as generalists in the past have developed specific deep tech efforts.
2. Fund I may be the place to look for outlier outperformance.
Of the 11 funds (excluding angel track records) that reported more than a 6x Net TVPI, 7 of them are Fund I. The highest reported return – a 33x fund! - was a Fund I.
3. The market for funds focused on diversity has matured.
While the diversity trend isn’t new, we’re now seeing more funds that have reached maturity and have developed track records. And, there are still a significant number of new funds trying to break into the space. Looking at it objectively, one might surmise that the space may be getting crowded, which is a great sign for diversity in venture since more people are dedicating their careers to improving diversity, and those who started three or four years ago are making good progress building sustainable investment platforms. Even with the limited number of spots, we have two breakout sessions at RAISE dedicated to diversity and overlooked founders, and the track records and teams appear stronger than in previous years.
4. Healthcare is hot.
For many years, venture capital firms were shutting down their health care practices. We see signs this trend may be reversing. With the aging of America, more funds than ever are focused on using technology to address human health and aging. We saw our first dedicated SilverTech fund and had to form two full breakouts around health care funds.
The Tipping Point Series, which includes Featured at RAISE, (“Tipping Point”) is a collection of interviews with fund managers who (a) have previously raised a venture capital fund and (b) are providing advice and insights into the formation and management of venture capital funds (the “Presentations”). Tipping Point is not an offer to sell or a solicitation of an offer to buy any security issued by any venture capital fund, including without limitation, any venture capital fund managed by Tipping Point’s speakers, presenters, or producers.
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