Re:RIP Good Times (2008)
by sroussey on Thursday May 19, 2022 @08:09PM
(#31441848)
It’s the other way around: LPs are telling VCs not to expect the allocations they might have expected. I hear 66% reduction from institutions, anecdotally. For several years going forward.
If an institution had 1:1 allocation public:private and public drops 80% then rebalancing will take a while.
If every startup and fund simultaneously took a 80% haircut, things would be smoother, quicker.
Unicorns don’t want to be marked at $200m and $10m preseed don’t want to be the $2m that is far more accurate value.
This dynamic will take a few years… private slowly coming to realize the new reality, public stopping the bleed, and allocations moving more public for several years.
If an institution had 1:1 allocation public:private and public drops 80% then rebalancing will take a while.
If every startup and fund simultaneously took a 80% haircut, things would be smoother, quicker.
Unicorns don’t want to be marked at $200m and $10m preseed don’t want to be the $2m that is far more accurate value.
This dynamic will take a few years… private slowly coming to realize the new reality, public stopping the bleed, and allocations moving more public for several years.