Friday Letter: Observations about recent VC-related activities

There's no letup in venture news, such as Facebook's VC plans, the industry's response to diversity issues and venture-backed companies kicking the tires on an IPO.

It’s been a busy 2020 in the venture world. And in light of a pandemic and the rise of recent protests for human rights around the world, it’d be easy to think that venture investing would ease up.

That has not been the case. And I had one GP tell me this week that when the pandemic hit in March, he and his co-workers and all their VC peers primarily focused their attention on their portfolios and giving regular reports to their LPs.

“Now a couple of months later and it feels just like it did in February and January,” he said. “There is a lot going on. We’ve all adjusted to the remote culture and we’re moving forward again.”

Sure enough, fundraising, deals, talk of exits and IPOs have made news this week, and it does seem like activity is picking up again. So let’s take a look at some recent events.

Facebook is looking to get in VC. Axios uncovered how the company posted a job opening and then filled the position of “head of investments” to manage a multi-million dollar fund to invest in leading private companies alongside top venture capital firms and angel investors. We’ve seen plenty of cycles in corporate venturing, and how companies will go all-in to create a CVC and then pull back during a downturn. So initially I thought it was an unusual decision by Facebook, but considering how much they’ve paid in big acquisitions of venture-backed companies, this would seem to be a smart move to put them in close contact with the start-up world. Also, the company has already hired Shabih Rizvi, a Google and Kleiner Perkins veteran who was most recently at Gradient Ventures, to help manage the new fund from the social networking giant.

There’s been a lot of chatter on Twitter and I’ve heard directly from a few investors about black entrepreneurs and what VC firms are doing to support people of color. This seems to be an ideal time to have a fund that focuses on black people in the start-up world. Former  Venture Capital Journal contributor Mary Ann Azevedo, now at Crunchbase, has reported on one such firm, Collab Capital in Atlanta, targeting $50 million. Likewise, I’ve come across one firm that I’m looking to write about in the next week or so. I won’t provide the spoiler on its name or partners, and they haven’t filed registration papers yet, but their firm launched prior to the recent protests and emotional outpouring over the death of George Floyd. Meanwhile, VCJ reporter Rebecca Szkutak is also working on a story about what firms are doing to address the inequities in the VC community.

I don’t see an open IPO window right now for VC-backed companies. Airbnb was supposed to this year, but covid-19 stalled the public debut plans of the home rental company. However, apparently many other companies are expecting the window to open later this year. SoftBank-backed insurtech company Lemonade has filed its plans for a $100 million IPO. And now big data provider Palantir Technologies is looking to raise its own offering in the fall. I’ve also read that cloud data company Snowflake is also testing the waters on an offering.

Let me know what you think. What are your thoughts on Facebook and corporate VC, the call for action to improve diversity in venture and the IPO outlook? If you have news or views you’d like to share with me, I’d love to hear from you. You can reach me at agoldfisher@buyoutsinsider.com and I’m open to voice and video calls.