As promised (but a day late), here are the results of our Venture survey. 427 respondents from all over the world contributed; thanks to all that contributed to this report.
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1/ 77% of the respondents reported that their primary initial investment stage is somewhere in seed stack (Pre-seed/Seed/Post-Seed) w/Median fund size of $50MM across all respondents.
2/Unsurprisingly, larger funds ($250MM+) primarily focus on A round+ as initial entry point, however it was surprising to find ~50% funds in $151-$250MM range identified seed as their primary entry point. This could be sample size issue and/or geo nuances.
3/VC’s indicated a higher portfolio health than expected as the average % of portfolio with at least 12 months runway was 70%. This is significantly higher than # I got in Feb, and could be inclusive of burn cuts that have recently been made.
4/Very few VC’s focus on pre-seed as initial focus (only 15% in SV said that they focus on pre-seed). I don’t know that this will change. I see more gravitational pull toward seed/post-seed in coming quarters.
5/ Despite VC posturing on twitter about being open for business as usual, it’s clear that 2020 activity will be way down as 81% of GPs indicated quarterly deal activity of <2 deals vs. only 56% of GPs who said they did <2 deals/quarter in 2019.
6/Valuation drops are expected across the board with nearly 70% of respondents across stages believing the drop will be at LEAST 21% (very few believed the drop would be 41% or higher though. Reading this, I think drops will be 25-35%; meaning A rounds might go to $15MM-$25MM pre
7/ Given the number of seed focused firms, I was surprised to see that only 20% of funds were modifying reserve targets. I had suspected more would want boost reserves to be able to play defense in what will likely be a market replete with down/flat/recap rounds.
8/ For those that did increase targets, they increased their reserves by 25%. This seems like a reasonable number; I’m wondering if we see the number of funds increasing reserves rise in the coming quarter.
9/ Nearly half of firms that are raising or were planning to raise a fund this year are downshifting targets; the reliance on HNW and FO for sub-$50MM funds (the largest component of sample set) is likely key factor driving this as larger funds did not convey same plan
10/Interestingly nearly 70% of respondents said that would make a core initial investment w/o meeting founder in person (but with Zoom/other medium) instead. This was a twitter poll w/~350 respondents.
11/Take a read as there are some very interesting nuggets;we will likely look to revisit this in 6 months. Thanks again for all of the ppl that contributed!
