Family offices sentiments towards Venture Capital [COVID-19 Impact]

Building an Impact VC Fund

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What excites me about starting a new venture fund during these challenging, uncertain, and unpredictable times of #COVID is private investors, especially #familyoffices, are not reducing their exposure to venture asset class.

In the recent survey report by Kauffman Fellows and First Republic Bank on Family Offices Venture Capital Sentiment.

Five stats that picked my attention are:
1. 62% of FOs are willing to allocate without a site visit (and without meeting a manager before the pandemic)

2. During COVID, projected allocations and new commitments did not change – will add an average 2 of new names in 2020 (which matches to the 2019 average allocations of 2)

3. 97% of family offices have no changes to their capital calls due to COVID or the subsequent lockdown. Only 3% expect to delay capital calls.

4. A large majority – 91% – of FOs are interested in sector or stage-specific funds. So, it makes a lot of sense in terms of identifying your niche and solid investment thesis as a fund manager, instead just doing spray and pray.

5. In the eyes of family offices, some general partners ("GPs") are attempting to deploy funds too quickly. The second most troubling factor is inconsistent communication from GPs to LPs.

Read the full report here or the analysis by Kauffman Fellows here.

Curated resources for further curiosity:

  1. [Podcast]: How Fundraising For Funds Has Changed in The World of COVID

  2. [Podcast]: How COVID Impacts LPs, Venture Funds, and the Macro Environment with Samir Kaji

  3. [Report]: PitchBook Benchmarks (as of Q4 2019)

  4. [Report]: Global Limited Partners Survey 2020 by EMPEA

  5. [Report]: Investor outlook on 2020 in light of COVID-19 by Private Equity International

I am continuously looking for first-time fund managers, that are looking to create their first-time impact funds with an edge or a differentiated value proposition in emerging economies. If you are building one, please do write to me. I would love to learn more from you and would be happy to help in any way.

With Love,

Sagar

About

"first followers" is founded by Sagar Tandon, a founding member at Moonshot Ventures. You can reach him at sagar@firstfollowers.co.

Occasionally, he blogs about the responsible investing, tech for good, venture capital, investment thesis, conscious capitalism, collaborative consumption, community, and humane lifestyle.

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