Venture Capital is both the frontier of technological innovation and an instrument of positive change in the world. The asset class is seeing transformational shifts as a wave of mission-driven NextGen VCs are entering the domain to change the world for the better by launching enduring and ethical VC firms. VC has become a medium whereupon the best and brightest can incite and accelerate the progress we need globally, and now is a fantastic time to launch your dream VC firm.
Close in 2022
Aspiring General Partners looking to launch their own Venture Capital Firms may want to consider starting in Q1 to maximize their chances of getting to a close in 2022.
Closing a fund can be a challenging and long journey with unpredictable arcs and obstacles. VC Lab’s free 16-week accelerator program aims to get fund managers to a close in 6 months or less, while typically, funds can take over 12 months to get to a first close.
Provident preparations now can enable fund managers to gain early traction in the year and give enough time for GPs to form teams, develop their theses, and begin building and activating their LP networks. This way, even if funds miss the closing window in May, they can bolster their chances of a successful first close in the fall of 2022
Booming Asset Class
The venture capital asset is thriving, and the data shows strong liquidity, growth, and returns in venture capital across the globe. Aspiring fund managers may want to start their venture firms in the near future and enter the venture capital arena to take advantage of the Cambrian explosion of startups and the consequent surge in innovation across many verticles that is occurring globally.
In their deliberations, fund managers may want to factor in the current attractiveness of the asset class to investors and the increasing number of LPs entering the space to finance new GPs. As outlined in our article ‘Why Invest in Venture Capital?,’ avid and historic backers of the asset class such as Harvard and MIT’s Endowments have recorded 34% and 56% ROI respectively in the last year.
New entrant GPs / LPs are also seeing record levels of returns, with the data showing that venture capital has outperformed every other asset class in the last 3 years and has demonstrated excellent liquidity, leading more LPs to enter.
Become a Catalyst
Aspiring GPs with the vision to incite positive change in the world can now bask and revel in the opportunities that present themselves in VC. The state of near-perfect transfusion of capital, talent, technology, and transparency means that fund managers can become the catalyst to spark a new era of innovation by financing their domains of expertise and the entrepreneurs within them.
Recently, due to the aforementioned levels of returns and high-profile VC-backed startup success stories, the asset class is beginning to lose its moniker as a risky and ‘alternative’ asset class and is garnering global attention. Simultaneously, transformational shifts are occurring with the ‘Rise of NextGen VCs’ and new LPs entering the space. The climate in VC is also nourishing talented founders and investors, with resources gradually becoming more broadly available, making this point in time a great time to launch a VC firm and accelerate the change the world needs.