Opportunity funds: Should you raise one?

This will likely be VC’s greatest fundraising query in 2023

Somebody The largest enterprise capital developments of the previous few years have been early-stage corporations elevating “alternative” funds to make investments that proceed on their most profitable bets. However will this pattern proceed amid a more durable fundraising market, quiet exit atmosphere and slowdown in late-stage funding affecting each enterprise capitalists and startups?

Earlier this week, TechCrunch first reported that Lux Capital has raised funds. What stood out was that the agency ditched the chance fund and mixed its early and late stage methods right into a single device that may focus totally on early stage deal making. This comes a number of weeks after Y Combinator introduced that it was additionally withdrawing from its late-stage technique.

At first I assumed these had been the primary few indications that 2023 can be the 12 months the chance fund pattern would finish, however in fact it isn’t that easy.

I feel whether or not to create a possibility fund for firms trying to elevate cash this 12 months will likely be a way more controversial query. I feel we’ll see considerably much less, however there’ll nonetheless be firms that improve them, with good purpose. Khosla Ventures and Canaan look like amongst them: In January, Khosla started elevating funds for a lot of new funds, together with a possibility fund, and on Thursday Canaan stated it has raised $850 million in two of its flagship early-stage funds. and a late technique, my colleague Connie Lozios reported.