Jason M. LemkinCEO, SaaStr · Co-Founder of SaaStr AI, SaaStr Fund, Adobe Sign

The Death of Micro Funds: The Future of Venture Capital Revealed

26 Apr 2024 · 1 min

Watch on YouTube

0:35

Speakers (including Jason M. Lemkin) argue that many "micro funds" are failing or will fail following recent market losses and tougher fundraising. Key claims: some micro funds were raised by founders or new managers with little-to-no track record despite weak portfolio performance ("likely a 1x portfolio"), and both high-net-worth founders and traditional GPs are reducing new LP commitments. The excerpt frames the last two years as an unusually permissive fundraising period that enabled inexperienced managers to raise double-digit-million first funds.

Chapters

I think we'll see the death of many of the micro funds, the funds that raised from founders, public market founders who now have had their net worth crushed and then gps like me and you who bluntly are probably writing less LP checks than we did before.
I think they're going to be decimate. I think they already are decimated. They don't know it. I think the last two years were insane. Were insane. And kudos to everyone that raised every new manager with absolutely no track record whatsoever, no exits, sitting on likely a 1x portfolio at best was able to raise double digit million, first time fund. Kudos to you because that never happened in venture before.