[PreMoney SF 2017] Mark Suster: "Upfront Ventures on the State of the Venture Capital Industry"

TL;DR

2013-2015 saw a rise in valuations, 2016 marked a decline. Global investors, corporate VC, and ICOs are changing the game.

Transcript

well this is my third time speaking of pre-money I'm happy to be here thanks for having me I was asked to speak today about I SEOs and how venture capital will disappear over the next five years I decided not to accept that challenge and instead I'd like to talk first about some things that I think you all know so 2013 2015 we saw a massive increas... Read More

Key Insights

• 👨‍💼 Valuations surged in 2013-2015 but declined in 2016, prompting a focus on responsible business practices.
• 🔠 Chinese FDI and corporate VC funds are reshaping the venture capital landscape, bringing in diverse capital sources.
• 🥺 ICOs face challenges like overcapitalization, lack of governance, and early liquidity, leading to regulatory scrutiny.
• 🍉 Global warming, in terms of capital influx, is reshaping the market, with potential impacts on industry returns.
• 😮 The influx of foreign capital, rise of corporate VCs, and ICO trends are likely to drive future funding opportunities.
• 🔠 Low interest rates and repatriation of capital are driving increased investments in venture capital.
• 😮 The rise of mega funds, changes in LP distributions, and increase in venture funds point to a robust market ahead.

Questions & Answers

Q: How did valuation trends in venture capital change from 2013 to 2016?

Between 2013 and 2015, valuations skyrocketed, but in 2016, there was a decline in valuations as venture capitalists invested less.

Q: What impact is foreign direct investment from China having on the US venture capital market?

Chinese FDI is reshaping the industry by injecting capital, setting up large funds, and driving global innovation trends.

Q: Why are corporate venture capital funds on the rise?

Corporate VCs are filling the investment gap left by traditional VCs, leveraging their resources and driving investments in disruptive technologies.

Q: What warnings does the speaker have about ICOs?

ICOs face challenges like overcapitalization, lack of governance, early liquidity, potential scams, and regulatory scrutiny, leading to a predicted backlash in the industry.

Summary & Key Takeaways

• 2013-2015 saw a surge in venture valuations, but 2016 marked a decline and increased focus on prudent business practices.

• Foreign capital influx, corporate venture capital, and ICOs are reshaping the industry landscape.

• Predictions include sustained funding warmth, potential negative impact of over capitalization, and ICO backlash.