Daily Take #2

During my discussions with investors and potential Limited Partners (LPs), there is invariably a sense of caution and a tilt towards conservative strategies, spurred by the prevailing market climate and the looming prospect of a recession in 2024. When confronted with such sentiments, I instinctively turn to the lessons of history, often invoking the wisdom of the legendary investor who needs no introduction: “Be fearful when others are greedy, and be greedy when others are fearful.”- Warren Buffett

This perspective also resonates with the market dynamics of 2021, where skyrocketing valuations driven by aggressive venture capital strategies led to overpriced rounds, consequently impacting fund performance. I firmly believe that the opportune moment to invest arises when fear pervades the market and valuations are more modest, particularly within the realm of venture capital. In such conditions, startups are compelled to bootstrap, fostering the cultivation of robust companies characterized by prudent resource allocation and swift attainment of cash flow positivity.

Thus, I am optimistic about this vintage for VC and believe investors should be too.