|
@infoarbitrage | |||||
|
Has VC Become So Big It Must Be Disrupted? tomtunguz.com/is-venture-cap… Wrong question. Right question: Have VC cash flows become sufficiently predictable that they can be efficiently monetized and traded in a public format? There are several conditions to this being true 1/
|
||||||
|
||||||
|
Roger Ehrenberg
@infoarbitrage
|
1. velj |
|
Multi-product. Early stage, growth, crypto, credit, etc. Diversification of fee revenue and carry streams is critical for a public market investor to do a proper DCF valuatoin 2/
|
||
|
|
||
|
Roger Ehrenberg
@infoarbitrage
|
1. velj |
|
Scale. AUM has to be large enough that when you PV the expected cash flows on a probability adjusted basis, you get a multi-billion $ valuation. Otherwise, it's not worth it. 3/
|
||
|
|
||
|
Roger Ehrenberg
@infoarbitrage
|
1. velj |
|
Publicly traded comps. Blackstone, Apollo, and Fortress before them all had these characteristics: Predictability. Multi-product. Scale. They just started from the private equity product and expanded across products and cap structure. No reason a multi-stage VC couldn't do it. x/
|
||
|
|
||
|
Bill Gurley
@bgurley
|
1. velj |
|
Really bad idea. Been done. Ask Ken Fox. What problem are you solving?
|
||
|
|
||
|
Roger Ehrenberg
@infoarbitrage
|
1. velj |
|
That’s not the right comp. ICGE and CMGI were completely different. Portfolios of venture investments, not multi product, multi strategy enterprises. The problem: liquid multi level equity incentives. The solution: publicly indexed instruments.
|
||
|
|
||
|
friedmandave
@friedmandave
|
1. velj |
|
How can you trade LP interests publicly? Don’t think you can do that at least in the US.
|
||
|
|
||
|
Roger Ehrenberg
@infoarbitrage
|
1. velj |
|
Nope. They'd become C corps. Especially in today's world. The biggies have done the conversions. I'd assume a VC-cum-alternative asset manager would do the same.
|
||
|
|
||
|
|
Angus Davis
@angusdav
|
1. velj |
|
There is actually a well functioning private market for this, for the very few firms who truly have predictable flows... the likes of dyalcapital.com et al
|
||
|
|
||
|
|
Angus Davis
@angusdav
|
1. velj |
|
For example axios.com/exclusive-vist…
|
||
|
|
||
|
Guy Wuollet
@guywuolletjr
|
1. velj |
|
Wouldn’t the tax treatment change given the partnership structure wouldn’t be maintained in all likelihood?
|
||
|
|
||
|
Roger Ehrenberg
@infoarbitrage
|
1. velj |
|
|
||