Friday Letter: What summer slowdown?

If you're not busy in pitch meetings and closing deals in July and August, are you really in venture? Activity this year seems robust yet again, as LPs and GPs alike see a summer surge in activity.

For years, I’ve continually heard that there’s a summer slowdown in July and August. I’ve heard investors and start-up founders alike take a break from meetings and committing money to wind down and spend time with family before fall and the start of the new school year.

I’ve been told this by GPs, LPs, company execs, PR agencies and even my fellow reporters. To all of them, I ask: “Are you kidding me?”

I have not felt an actual summer slowdown for a long while. I feel that everyone in the venture industry is doing their best impression of a doctor performing triage; they are always on the ready. Yes, many of you may briefly power down. But venture has swelled to such significance in size, and well beyond the cottage industry it was in the 20th century. Now there’s always something going on. Activity has been and remains robust.

One LP described this summer to me recently by saying that there is a lot more “intellectual horsepower” out there with “more business and more funds to look at” than ever before.

A lot of people may argue that tech investing and venture firm fundraising used to see a lull in the late summer, but the pandemic has wiped that away since it prevents people from easily jetting away on off-the-grid vacations.

Maybe covid-19 has contributed a little. But in truth, activity has been spiraling up for years, even in the summer months.

Currently, there are more than 800 companies worldwide valued at $1 billion or more, according to the unicorn tracker of CB Insights. In mid-June, that figure had just crossed 700. So more than one unicorn a day was added this summer.

On the fundraising front, PitchBook-NVCA Venture Monitor confirmed the ongoing robust activity when it reported (with a focus on US-based firms) that the venture community is rewriting the history books.

After six months, firm-level fundraising is taking off, with investors closing vehicles worth a total of $74.1 billion, about 91.5 percent of 2020’s record-breaking amount. I’m certain the record was already passed this summer.

We’ve seen lots of fund closes recently. Just this month Craft Ventures raised $1.1 billion for two funds and Felicis Ventures wrapped up its fund at nearly $1 billion.

Again, I’m not one to believe a slowdown exists. If anything, can we call it a summer surge?

And on the topic of fundraising, our research team at Venture Capital Journal is gearing up for its next annual VCJ 50 report on the top fundraisers over the previous five years. I expect the data will also demonstrate how vigorous fundraising has been.

On that topic, we’re reaching out now to talk to LPs and GPs about their appetite and outlook for fundraising.

Let me know what you think. You can hit me up at agoldfisher@buyoutsinsider.com.