Featured at RAISE

Taking the Pulse of Our LP Community Amidst Uncertainty

June 15, 2023

Taking the Pulse of Our LP Community Amidst Uncertainty

This May, we had the privilege of hosting the 3rd RAISE LP Summit, "The LP Playbook: Proactive Management in Uncertain Times." Over 245 members of the RAISE LP community joined together to share insights on navigating firm management in volatile times.

As always, we took this opportunity to gather insights from the group via live polling during the event. Here's what our LP community had to say.

1. Cash Runway for Portfolio Companies Is a Big Concern

Not surprisingly, the shrinking cash runway of portfolio companies in this current climate is a major concern for 41% of our LP participants. Not far behind, 34% of LPs are troubled by the time it takes for portfolio companies to become liquid.

What is your biggest concern in today's VC market?

2. Increased Readiness to Consider Secondary Transactions

Anticipating that liquidity might be high on the list of concerns, we sought to understand the selling price threshold for secondary transactions. We found that 39% (up from 27% last year) would contemplate selling their legacy assets in a secondary market if they could secure a price of 90-100% of NAV. This shows a rise in readiness to consider secondary transactions at lower prices compared to last year.

You would consider selling legacy assets in a secondary if you could get a price of?

3. Commitments to Existing GPs Are Being Reassessed

Understanding that unstable times often necessitate a proactive approach to portfolio diversification, we learned that 41% of responding LPs are reassessing their options concerning existing relationships, while 31% are choosing not to re-allocate to certain managers.

Which of these statements best describes your commitments to existing relationships?

4. Selective Deployment Continues

In an attempt to help forecast capital deployment in the coming year, we saw an overwhelming 77% of responding LPs describe their strategy as selectively deploying, demonstrating a cautious yet hopeful approach.

How would you describe your VC deployment strategy over the next 12 months?

5. LPs Are Optimistic About Lower Entry Points and Better Terms

Despite the challenging market landscape, new opportunities often emerge. Lower entry points have 42% of our LPs buzzing, and a notable shift of power leading to more investor-friendly terms has a quarter of attendees equally excited.

What are you most excited about in the changing market?

6. DPI Is the Most Critical Performance Measure

Lastly, we sought to understand the evolving KPIs for our LPs. Distribution to Paid-In capital (DPI) was unsurprisingly the most critical performance measure for 46% of respondents, followed by Multiples, and IRR a close third.

When thinking about performance, what is most important to you?

We’re looking forward to another pulse check with hundreds of LPs this fall, when they join us for the eighth annual RAISE Global Summit, October 26th in San Francisco.

If you are like the other LPs we spoke to recently and are seeking relationships with the next generation of focused, right-sized funds, please request an invitation today. If you have emerging managers who might be interested in applying, please ask them to apply on this page by June 30th.



The Tipping Point Series, including Featured at RAISE articles, (“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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Tipping Point is produced by Raise Conferences, LLC (“Raise”).  Raise is a private invite-only venture capital conference, which provides a forum for venture capital funds to network with and present to potential venture capital investors.  Although Raise produces Tipping Point, the Presentations are independent of Raise’s conference and do not provide any forum for the Tipping Point speakers, presenters, or producers to solicit the sale of any securities.

RAISE Editorial
The RAISE editorial team includes on-staff writers and researchers from RAISE Global.

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