ark Goldberg knows how much the venture capital market has changed in recent years. A partner at Index Ventures, Goldberg remembers the days when investors would meet up on Monday mornings to sip cappuccinos, pore over pitch decks and dig into due diligence. But in today’s record-breaking market, things look a little different. At his firm, lengthy investor meetings have been replaced with blocked calendar slots in case a partner has to sign a last-minute term sheet quickly.
For many that has meant making the process more fluid than formal. VCs aren’t waiting for companies to come pitch to them, instead they are constantly tracking and gathering insight on startups that could be potential portfolio companies in the future. Multi-stage firm Felicis Ventures even hired a head of research in 2021 to assist with this. Frontloading the work gives VCs a “prepared mind” — as multiple investors put it — allowing them to move quickly when presented with a term sheet.
As a solo general partner, Nisha Desai, the founder and managing partner at Andav Capital, says last year forced her to be incredibly disciplined with her time to make sure she gives herself enough time to properly research and prepare. Thankfully though, she thinks founders have also leaned into the dynamic. “I will say founders have gotten smarter about due diligence. I rarely get deep or even do a first call, until I have enough information,” she says.
Although the most active investors in 2020 were blue chip venture firms, the first half of 2021 saw crossover funds Tiger Global and Insight Partners take pole position, according to data from. “The hedge funds and public investors who've come into the private markets have pushed the existing private investors like us to start upping our game on how we do diligence,” Maltz says.
Tiger Global and others invested big $$ and very quickly They will pick up big fees on their funds but I will be shocked if they end up with a good IRR on those funds
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