Where are all the venture capital LPs?
Clear pattern from our data over the past 5 years from 1,500+ US venture funds.
1) The total number of LPs has fallen every year since 2022
2) The median number of LPs per fund is down across every emerging fund size
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This means the median check size into a venture funds has gone up somewhat (but mostly a function of smaller checks being much harder to come by).
This means there are more funds chasing fewer "in-market" LPs - and knowing which LPs are truly in-market is half or more of the battle.
This goes some way to explaining the extended fundraising timelines faced by many emerging managers today.
Will this make LP management slightly easier for the funds that are able to complete a raise? Hopefully! But no guarantees there.
Maybe I'll regret saying it, but one takeaway you could have here is that it is usually not worthwhile for GPs to try and convince LPs who have never committed to venture to do so for the first time. The capacity for wasted time is just too great.
Good luck on the search, GPs!
PS: New Carta benchmark data on IRR, TVPI, DPI, etc out next week. Waitlist here: https://lnkd.in/ga7cXyz9
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