Featherweight VCs On The Rise
Not everyone wants to raise a billion-dollar VC fund. “Featherweight” VCs are alive and well, and in fact, soaring and thriving in 2019.
Micro and Nano
Let’s tackle the smallest funds first. “Nano VC” is relatively new in the venture lexicon, and its definition is somewhat in flux. A managing director at First Republic Bank who has tracked the phenomenon of small venture funds for years, coined the term to describe VCs raising $15 million or less. Recently, we’ve heard the term “Nano VC” used to reference funds under $25 million, a slightly more expansive definition (perhaps accounting for growing seed and early-stage deal size).
On the Rise
U.S. venture fundraising data this year reveals a lot of smaller, more vertical focused funds closing on capital. Newcomers are rolling out fresh early-stage funds, and we are increasingly seeing the trend of established ventures opting to keep fund size constant or a bit smaller.
The up and rising of featherweight funds serve as a reminder that supergiant VCs are somewhat of a digression for the industry. While VCs compete to back massively scalable startups, they often end up inflating valuations than fostering great companies.
The Outlook
For now, it looks like pressure to become the next Vision Fund has retroceded a bit, with unicorn-chasing giants carving out their very own niches and setting up smaller funds to eye on other opportunities.
A little about Catalyst Ventures: We are a venture capital firm based in Hong Kong. We are always looking to invest in early-stage startups in Travel Tech and Marketing Tech. Ping us if you think we should connect! We love making new friends ;)
