{"id":22624,"date":"2023-06-15T18:00:06","date_gmt":"2023-06-15T18:00:06","guid":{"rendered":"https:\/\/entertainment.runfyers.com\/index.php\/2023\/06\/15\/vcs-joining-the-climate-race-should-scare-the-daylights-out-of-you\/"},"modified":"2023-06-15T18:00:06","modified_gmt":"2023-06-15T18:00:06","slug":"vcs-joining-the-climate-race-should-scare-the-daylights-out-of-you","status":"publish","type":"post","link":"https:\/\/entertainment.runfyers.com\/index.php\/2023\/06\/15\/vcs-joining-the-climate-race-should-scare-the-daylights-out-of-you\/","title":{"rendered":"VCs joining the climate race should scare the daylights out of you"},"content":{"rendered":"


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Venture capital, as an asset<\/span> class, is an industry of short-term wins. Most funds have a 10-year cycle: two years of initial investments; then two to three years of company building and follow-on investments; after that, five or six years of thumb-twiddling and waiting for the ship to come in, and maybe placing a last bet on the most promising companies in the fund portfolio.<\/p>\n

This model forms part of a VC\u2019s investment thesis; it also includes where the leads for potential investment come from (known as \u201csourcing\u201d), along with the investment stage (pre-seed, seed, Series A, etc.), and any geographic or vertical or market limitations to the fund. The investment cycle has remained remarkably consistent over the history of venture capital: Wait 10 years, and the funds invested have (hopefully) multiplied.<\/p>\n

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The upshot of these investment cycles is that venture capital is best positioned to invest in the type of companies that are in a hot market, with predictably high user and revenue growth, and a somewhat obvious liquidity event outcome, whether through acquisition or IPO. All of this is why subscription-based companies \u2014 and in particular cloud-based subscription software companies \u2014 are so well-suited to VC investment. B2B SaaS companies that know the market, know how to leverage data-driven growth and have a clear customer acquisition funnel are as close as it gets to a safe bet in venture.<\/p>\n

Another \u201csure-fire bet\u201d for venture capitalists is when the future can be predicted, even a little bit. Big shifts in legislation is one example: Build software that helps companies stay in compliance with certain laws likely to pass soon<\/a>, and you know you have a guaranteed customer base. Another sure-fire bet with a guaranteed user base: Watching the population curve<\/a> and realizing there are a lot of people about to retire and need support. None of this is new; VC firms have built specialized theses around these types of huge moves.<\/p>\n

A recent McKinsey report<\/a> suggests that \u201cinvestments in climate technology are still increasing, defying the headwinds that affected most capital markets.\u201d<\/p>\n

Both VCs and founders alike love to talk about how they want to make the world a better place. That\u2019s lovely and all, and it may even be true for some of them. But make no mistake: Venture capital is an asset class like any other, and general partners have a fiduciary responsibility to their limited partners. Everyone may agree that it\u2019s lovely to make the world better, but unless the investors start to see a return on their investments, that firehose of investment very quickly gets reduced to a trickle.<\/p>\n<\/p><\/div>\n


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Venture capital, as an asset class, is an industry of short-term wins. Most funds have a 10-year cycle: two years of initial investments; then two to three years of company building and follow-on investments; after that, five or six years of thumb-twiddling and waiting for the ship to come in, and maybe placing a last […]<\/p>\n","protected":false},"author":1,"featured_media":22625,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[14],"tags":[],"class_list":{"0":"post-22624","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-tech"},"_links":{"self":[{"href":"https:\/\/entertainment.runfyers.com\/index.php\/wp-json\/wp\/v2\/posts\/22624","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/entertainment.runfyers.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/entertainment.runfyers.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/entertainment.runfyers.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/entertainment.runfyers.com\/index.php\/wp-json\/wp\/v2\/comments?post=22624"}],"version-history":[{"count":0,"href":"https:\/\/entertainment.runfyers.com\/index.php\/wp-json\/wp\/v2\/posts\/22624\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/entertainment.runfyers.com\/index.php\/wp-json\/wp\/v2\/media\/22625"}],"wp:attachment":[{"href":"https:\/\/entertainment.runfyers.com\/index.php\/wp-json\/wp\/v2\/media?parent=22624"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/entertainment.runfyers.com\/index.php\/wp-json\/wp\/v2\/categories?post=22624"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/entertainment.runfyers.com\/index.php\/wp-json\/wp\/v2\/tags?post=22624"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}