Venture Capital - Risk Comes Off Fast and On Slow

Good morning…

I am off very early this morning to Palomar Mountain in San Diego for a beast of a training ride. My ride will be approximately 4,500 feet of climbing over 12 miles and a 7 percent grade. I have not beaten 2 hours on the climb but am shooting for that today.

Onward…

Yesterday, Bill Gurley one of the legends in the venture industry, offered up a simple series of tweets that capture the state of venture capital right now:

In late 2021, risk came off very fast - at least in technology public markets where prices are set every day.

For some reason, too many venture capital investors did not understand that message or that of the public markets, react, or care.

While technology public markets have bounced and rallied hard in 2023, venture market prices continue to drop (at least beyond the seed round). This divergence is going to further freak out the weak venture capitalists (and founders and LP’s) as time passes from here now. The message is coming down the line for those that did not know how to read it.

It is an extra reason now in private markets that as Bill says, risk-on is very slow.

If you did not know, now you know.

Have a great day.