Notable Capital's Hans Tung on the state of VC and the upside to down rounds | Equity Podcast

Notable Capital's Hans Tung on the state of VC and the upside to down rounds | Equity Podcast

Investment Landscape

  • Down rounds are not necessarily negative, especially compared to shutting down a company.
  • Founders should focus on managing business fundamentals rather than comparing themselves to hot sectors.
  • The pace of investing has slowed down compared to 2021 but remains higher than in 2022.
  • Some firms are impacted by overinvestment in 2021, slowing their current investment pace.
  • High valuations from previous rounds can prevent companies from going public, leading to a lack of liquidity and exits for investors.

Notable Capital's Investment Focus

  • Notable Capital, formed after the split of GGV Capital, focuses on investments in the US, Latin America, Israel, and Europe.
  • The firm's investment interests include cloud infrastructure, business and consumer applications, and fintech.
  • Notable Capital's name reflects its focus on investing in notable founders, causes, ideas, people, and investors.
  • The firm has invested in companies such as Airbnb, Slack, Slice, StockX, and Zenes.

Fintech Sector

  • Fintech remains a promising sector despite recent funding challenges.
  • The market cap of public fintech companies is only 5% of the total market cap of financial services companies, indicating significant growth potential.
  • Notable Capital is bullish on the Office of the CFO Suite, as technology can help businesses convert assets into cash more quickly and manage supply chains efficiently in the current economic environment.

Trends in the Venture Capital Ecosystem

  • There has been a trend of operators becoming investors and then returning to operating roles or joining startups.
  • The venture capital world is experiencing changes, with some firms choosing to become larger and more multi-asset class, while others remain nimble and focused on specific sectors.
  • Exits for startups have become more varied, including IPOs, M&A, and secondary sales.
  • Secondary sales have become more common, with startups like Stripe and Brex using this route to provide liquidity to employees and investors.
  • The growth of remote work and distributed teams has made the venture capital ecosystem more global and accessible to investors worldwide.

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