This will be the biggest VC fundraising question in 2023
one of The biggest venture capital trend of the past few years has been early-stage companies pooling “opportunity” money to make follow-up investments in the most successful bets. But amid a tougher fundraising market affecting both angel investors and start-ups, a muted exit environment and a slowdown in late-stage financing, will this trend continue?
Earlier this week, TechCrunch first reported that Lux Capital was raising funds. What has emerged is the company shedding its opportunity fund and combining its early- and late-stage strategies into one vehicle that will focus primarily on early-stage dealmaking. This came just weeks after Y Combinator announced that it was rolling back its late-stage strategy as well.
At first, I thought these were just the first few indications that 2023 is likely to be the year the opportunity fund trend dies, but of course, it’s not that simple.
I think whether to raise the Opportunity Fund will become a more discussed question for companies looking to raise money this year. I think we’ll see significantly fewer of them, but there will still be companies that breed them for good reasons. Khosla Ventures and Canaan appear to be among those: In January, Khosla began fundraising for a raft of new funds, including the Opportunity Fund, and on Thursday, Canaan said it raised $850 million across two funds, its early-stage flagship fund and late-stage strategy. , says my colleague Connie Luzios.