“The end is not nigh,” said Frank Caufield, managing partner at Darwin Ventures.
Caufield, speaking at PartnerConnect West 2016 at the Hotel Nikko in San Francisco in late September, said that despite the uncertainty surrounding the presidential election, fluctuating valuations this year and a drop in deal activity, he was confident that venture will continue to grow and be strong.
The venture industry has survived multiple presidential elections and will continue to thrive past this one, said Caufield, who spoke on a panel about how best to prepare for a coming storm.
Ashuh Garg, general partner at Foundation Capital, spoke on the same panel and echoed Caufield’s sentiment.
“The boom times are coming,” Garg said. “We’re headed for a 10-year period of growth.”
Eva Ho, general partner of Susa Ventures and co-founder and general partner of recently launched Fika Ventures, took an opposing view. She said she was concerned about the election and other factors, particularly in the education sector.
One common theme discussed throughout the PartnerConnect event Sept. 27 and 28 was that a lot of capital has been raised this year by large and emerging managers, and it has to be deployed.
Aileen Lee, founder of Cowboy Ventures, said she was concerned about the overhang from U.S.-based venture firm fundraising, which could reach $40 billion if the current pace holds up.
Malcolm Goepfert, director of investments at the James Irvine Foundation, said that his email inbox is jammed with requests to meet from so many funds in the market.
Similarly, Jill Frankle, managing principal at Knightsbridge, who took note of VCJ‘s recent coverage of how many registered funds were currently in the market, said the amount of new seed-focused and micro VCs has tapered off from earlier in the year, but a lot of them are still fundraising.
Brijesh Jeevarathnam, partner and co-head of global venture fund investments at Adams Street Partners, connected the recession of eight years ago with the current spike in fundraising.
He noted that in 2008, in the face of the global recession, many firms began to wonder whether institutional investors would remain committed to new funds, so firms began to add new LPs. He speculated that the tide is beginning to turn as the number of LPs in funds may soon drop.
Jeevarathnam said he was not too worried about the current pace of fundraising. Adams Street, he said, has been backing more early-stage funds and moving the portfolio away from funds that back pre-IPO companies because of concerns with valuations at that stage.
He said, however, that the current environment is good for entrepreneurs because of abundant non-traditional sources of cash, from hedge and mutual funds, sovereign wealth funds and corporates, among others.
“They’re here to stay,” Jeevarathnam said.
Feature photo of Brijesh Jeevarathnam, partner and co-head of global venture fund investments at Adams Street Partners, by Alastair Goldfisher