Editor's Note: Our annual Vator Splash Spring 2016 conference is around the corner on May 12, 2016 at the historic Scottish Rite Center in Oakland. Speakers include Tom Griffiths (CPO & Co-founder, FanDuel), Andy Dunn (Founder & CEO, Bonobos), Nirav Tolia (Founder & CEO, NextDoor), Mitch Kapor (Founder, Kapor Center for Social Impact); Founders of Handy, TubeMogul, VSCO, Vinted; Investors from Khosla Ventures, Javelin Venture Partners, Kapor Capital, Greylock, DFJ, IDG, IVP and more. Join us! REGISTER HERE.
At Vator Splash Spring on May 12, we will be holding a series of panels on the state of the current venture capital landscape, including one called, "With the market slide, what’s the outlook for venture?" where we will ask top VCs to give us their view on not just what's happening in venture, but what they think the rest of the year will look like.
The panel will be moderated by Jules Walker, Venture Director at KPMG, and will feature Tianxiang Zhuo Managing Partner of Karlin Ventures; Jules Maltz, Partner at IVP; Alex Rosen, Partner at IDG Ventures; and Erik Rannala, Partner at Mucker Capital.
So far, things have been a little grim for venture this year.
In the U.S., startups raised $13.9 billion in the first quarter, a 25 percent decrease in funding compared to Q4 2016, and a 21 percent drop year-to-year. In all, there were 883 VC deals, a six percent decrease from the previous quarter, and 12 percent drop from Q1 2015.
The numbers are bad enough that venture capital funding hasn’t been this hard to come by since 2014.
I asked each of the panelists to give a preview of their thoughts on what venture will look like from here on out.
Jules Walker: "The amount of dry powder available for investment is still at a high level. Innovative start-ups doing cutting-edge work will continue to get funded, it may just take longer for the check to hit the account due to extended diligence periods."
Erik Rannala: "So far, this year looks very different than last year for venture-backed startups raising funding. The market has clearly turned and fundraising has gotten much harder. The bar has gone way up, and capital is not flowing freely the way it has been for the past several years. Everyone needs to adjust to the implications of this 'new normal' for their businesses. Founders should not assume there is more funding around the corner. They need to ruthlessly manage burn and chart a course toward self-sufficiency. I don't see this situation changing dramatically anytime soon."
Jules Maltz: "2016 should be a strong year for new investments. Valuations have moderated, non-traditional firms have exited the market, and underlying company fundamentals remain strong. While total deal volume should decline, the quality of investment opportunities is increasing."
Alex Rosen: "The early stage VC market remains very active, despite the hiccup in the beginning of the year. I expect it will get tougher by the end of the year, but right now we're seeing lots of good companies getting funded"
Tianxiang Zhuo: "Innovation in tech is happening faster than it ever has. I remain very optimistic about venture as there continues to be an exciting opportunity for us to accelerate this innovation through intelligent use of capital."
(Image source: oaklandscottishrite.com)
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Steven Loeb
Angel group/VC
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We partner with exceptional entrepreneurs who have deep domain expertise, principally in the greater Los Angeles area, to provide their earliest institutional funding and work side-by-side to help launch and scale their new ventures. But, it is our conviction that we must provide more than just capital. As operators and entrepreneurs ourselves, we roll up our sleeves and work with entrepreneurs in all parts of their businesses that need additional resources.
Angel group/VC
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IDG Ventures is a global network of venture capital funds with approximately $3.6 billion under management and a portfolio of over 220 companies built over the last 15 years. The IDG Ventures network is comprised of five independent partnerships managing funds in North America and Asia. Each partnership makes investments on behalf of its limited partners, including International Data Group (IDG), the world's largest IT media company. By combining the IDG platform – an unparalleled combination of global publishing, market research (IDC), and conferences and exhibition resources – with years of hands-on experience in early-stage company building, each IDG Ventures fund helps companies understand their markets better and penetrate them faster than their competition
Angel group/VC
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Karlin Ventures is an early-stage venture capital fund based in Los Angeles. They are value-add partners helping entrepreneurs who take contrarian approaches to create impactful solutions to big, interesting problems. Karlin Ventures is an affiliate of Karlin Asset Management, a private investment firm managing over $1.4 billion of unleveraged equity capital.
Service provider
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KPMG LLP, the audit, tax and advisory firm, is the U.S. member firm of KPMG International. KPMG International's member firms have 137,000 professionals, including more than 7,600 partners, in 144 countries.
KPMG's Venture Capital (VC) Practice was created to provide the unique guidance and insights our clients in the VC community need to ensure success in the marketplace. Our services are specifically designed to help venture-backed companies navigate each stage of development—from inception to market leadership. Our seasoned VC professionals are dedicated to assisting clients through the many challenges faced in founding and growing a new venture.
Just getting started? Closing that big growth round? Contemplating an IPO? KPMG’s Venture Capital Practice can help prepare you for the opportunities as well as the obstacles that lie ahead. KPMG developed its service suites to align with the interrelated needs of growing companies on their journey to leadership. Each service suite draws on KPMG’s
knowledge, experience, networks, and commitment to quality and can help deliver significant benefits to growing companies. The Venture Capital Practice includes a large network of professionals who have experience working with new and established companies.
Angel group/VC
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With $7 billion of committed capital, IVP is one of the premier later-stage venture capital and growth equity firms in the United States. Founded in 1980, IVP has invested in over 300 companies, 106 of which have gone public. IVP is one of the top-performing firms in the industry and has a 36-year IRR of 43.2%. IVP specializes in venture growth investments, industry rollups, founder liquidity transactions, and select public market investments. IVP investments include such notable companies as AppDynamics (CSCO), Business Insider (Axel Springer), Buddy Media (CRM), Casper, Compass, Datalogix (ORCL), Domo, Dropbox, Dropcam (GOOG), Fleetmatics (FLTX), GitHub, HomeAway (AWAY), The Honest Company, Kayak (PCLN), Klarna, LegalZoom, LifeLock (LOCK), Marketo (MKTO), Mindbody (MB), MySQL (ORCL), Netflix (NFLX), Omniture (ADBE), Personal Capital, Pure Storage (PSTG), Slack, Snap (SNAP), SoFi, Supercell (SoftBank), Tanium, Twitter (TWTR), Yext (YEXT), ZipRecruiter, and Zynga (ZNGA). For more information, visit www.ivp.com or follow IVP on Twitter: @ivp.
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Two decades of investing in, and working with, software and consumer companies.
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Co-Founder & Managing Partner, Mucker Capital
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General Partner @Karlin Ventures. Worked at McKinsey & Co, Innovation Endeavors and founded online textbook retail company. Stanford GSB MBA.
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Jules re-joined KPMG in September 2011 to help take the Emerging Technology practice to the next level. We work with pre-IPO companies providing audit, tax and advisory services locally and globally.
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Jules Maltz is a General Partner at IVP and led IVP's investments in Buddy Media (CRM), Checkr, Dropbox, Indiegogo, NerdWallet, Oportun, RetailMeNot (SALE), Slack, SteelBrick, TuneIn, Zendesk (ZEN), and Zenefits
