Michael Kim’s Post

Does it make sense to invest in illiquid VC funds earning 6% vs highly liquid, publicly traded equities generating 20% returns? It could if alternatives are used as a tool for portfolio diversification rather than just a way to amplify returns.

#Venturecapital funds are being #extended beyond their typical 10-year term to try for bigger exits, but waiting often reduces the fund’s rate of return (IRR). Despite this, investors (LPs) are accepting longer timelines and adjusting their expectations. However, extensions often #disappoint, as most funds with extensions fail to return their full value after 10 years. Insight Partners Partners PitchBook Angeles Investors KKR Acrew Capital

The VC and PE landscape has faced challenges in distributions over the past two years, with VCs hitting a 14-year low of 5% in distributions as a percentage of net asset value. Meanwhile, we at Flashpoint Venture Capital achieved 6 significant exits in the last 12 months bringing the total exit count to 20, showcasing resilience and success in the industry. Learn more about the dynamics of exits in the VC world in my recent article for Forbes Finance Council #VC #PrivateEquity #Exits #FinanceCouncil

Venture Capital News - Venture Capital News Headlines

Great points on adaption to a changing environment.

Is it time to rethink VC classifications beyond just emerging vs. established? Take a large VC firm, for example: a $500M Fund IV following a $250M Fund III. Funds I and II delivered 3.5X and 2.0X DPI respectively, while Fund III is still in early stages. These swift moves signal a strategic shift in investment focus. So, despite solid performance over the past five years, should we consider this manager truly established? Preface Ventures' Farooq Abbasi introduces the concept of 'developing managers'—firms that are evolving and delivering consistent returns but still have significant growth ahead. This is a must-read for LPs refining their approach to fund selection and support. Check out the full article below to explore why it might be time to think beyond traditional labels in #VC.

With well-defined ambitions and the right capabilities, investors can tap into the growing VC market. This article by Ahmed El Sharkawy and Chady Zein offers several strategies to help investors ride the VC wave. #VCopportunities https://lnkd.in/dksMi3PF

VCFA Group solidifies its secondary market dominance, closing VCFA Venture Partners VII with $122.5M, championing complex VC and growth equity transactions. @VCFA Group #PrivateEquity #VentureCapital #SecondaryMarket

Exit Options for LPs in VC Funds LPs who invested in VC funds but can't wait for the 10-13-year period can sell their interests in secondary markets. A secondary market allows you to sell your fund interests to another interested party without waiting for the company to go public or merge. These funds provide liquidity to LPs, GPs, or other key stakeholders who can't wait for the long-term horizon. The secondary funds buy existing interests in growing companies, meaning the capital goes to early investors rather than for the company's growth, unlike primary capital. The secondary market is growing and is expected to reach $130 billion in 2023/2024. Alternative for LPs: If you're an LP who can't wait 10-13 years, secondary funds offer a shorter-term option to diversify your portfolio. Will talk about the distinction between direct secondaries and LP interests in my next post. #VC #secondries Image Credit: Industry Ventures

Delighted to be mentioned in this round-up of things to know for emerging managers of first-time funds! I am, of course, biased, but I believe that design is critical (and often overlooked) when developing marketing materials for any fund. Whether by creating an identifiable visual brand, providing an authentic and professional look within a crowded and competitive market, or streamlining complex information into clean visuals, design is a vital part of the pitch deck development process 🎨