LPs

Friday Letter: Here’s why LPs and GPs are upbeat

Six venture-focused LPs gathered for a virtual roundtable and shared their comments on various topics. The result is that we learned how equally enthusiastic about venture they are.

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There’s a John Lennon song that contains the famous quotation: “Life is what happens to you while you’re busy making other plans.”

At the time, he was talking about being a parent, but those words could also refer to 2020. This has been a rollercoaster of a year, as our personal and work lives have been upended with uncertainty and unforeseeable events, in part due to covid-19 and an economic slowdown.

But humans are flexible and resilient, and keep pressing on despite the circumstances they encounter, which brings me to our September/October cover story: our virtual LP roundtable.

We checked in with a cross-section of the LP community, bringing together a half dozen LPs from various organizations in a 90-minute Zoom panel discussion. They gave us their perspectives on diversity, fundraising, the impact of covid-19 and the healthtech sector.

They also told us how they’re feeling about the venture asset class at the moment. Spoiler alert: they’re upbeat about their prospects, and seem to agree that a lot of innovation will come out of the current era.

Part of what’s driving this positivity is that we all remember the last recession 12 years ago and the unicorns that were eventually born out of that period. Airbnb, Pinterest, Slack, Square, Groupon, WhatsApp, Instagram and Uber, to name but a few, were founded in 2008-10.

FOMO is alive and well and no VC or LP wants to miss out on the next big thing. That sentiment is in line with what I hear: recessions are bad and many people may suffer through the current era, but VC-backed innovation generally tends to thrive in these situations.

As Venky Ganesan of Menlo Ventures said to me in early August: “Periods of massive change is when transformation happens in the venture world. I’ve never been more bullish.”

That, no doubt, explains why the six LPs in our roundtable are so upbeat.

If a lot of great innovation is expected to come out of this period, then why wouldn’t investors remain optimistic?

Give their virtual roundtable comments a read and let me know if you agree. I would love to hear from you.

You can reach me at agoldfisher@buyoutsinsider.com and I’m open to voice and video calls.