{"id":27633,"date":"2023-03-27T22:34:46","date_gmt":"2023-03-27T22:34:46","guid":{"rendered":"https:\/\/scienceandnerds.com\/2023\/03\/27\/are-solo-gps-screwed\/"},"modified":"2023-03-27T22:34:47","modified_gmt":"2023-03-27T22:34:47","slug":"are-solo-gps-screwed","status":"publish","type":"post","link":"https:\/\/scienceandnerds.com\/2023\/03\/27\/are-solo-gps-screwed\/","title":{"rendered":"Are solo GPs screwed?"},"content":{"rendered":"

Source:https:\/\/techcrunch.com\/2023\/03\/25\/venture-capital-solo-gps\/<\/a><\/br>
\nAre solo GPs screwed?<\/br>
\n2023-03-27 22:34:46<\/br><\/p>\n

\n

Entrepreneur Ankur Nagpal<\/span> raised a $70 million venture fund last year, called Vibe Capital<\/a>, from over 200 investors. But now, as the market shifts and LPs are less interested in venture capital, the Ocho founder is shrinking the fund side by roughly 43%, canceling capital calls, and, ultimately, sending back money that had already been wired to the fund.<\/p>\n

The contraction, Nagpal told TechCrunch, occurred because he\u2019s busy building his own startup<\/a> and the funding environment has shifted to more realistic expectations: \u201cWhat looked like a $10 billion outcome is now a $1 billion dollar outcome.\u201d As a result, he says he\u2019s more confident on returning a higher multiple if he\u2019s investing from a smaller fund size.<\/p>\n

His LPs were surprised but \u201csuper happy\u201d to get the capital back, Nagpal said. Since announcing the cut, the founder says that five different solo GPs have messaged him asking for introductions to LPS who just got capital back. \u201cI think the reality is a lot of these people who are getting money back are actually not going to allocate it to venture anymore.\u201d One of Nagpal\u2019s biggest investors is Tiger Global, which has become notorious for retreating<\/a> from venture fund bets. His other investors, namely venture funds, will likely use the capital to bet on new startups out of their own fund, he said.<\/p>\n

In Nagpal\u2019s case, the move will let him put 90% of his time into his new startup. But he says others in the solo GP world are going through a rough time. Many are shrinking fund goals, extending fundraising timelines, teaming up with investors to avoid team risk or even going toward placement agents, once taboo in the world of fundraising, to help them close investors in exchange for a fee. \u201cEven the ones who are taking it seriously are actually now trying to build a firm, so you\u2019re kind of becoming the thing that you were trying to replace,\u201d he said.<\/p>\n

It\u2019s a shift from the fund of fund mentality<\/a> that felt commonplace last year, in which investment firms cut checks to early-stage, experimental investors to de-risk and even lead first checks into a generation of new startups. At the time, Tiger announced its $1 billion fund to back other funds but has since reneged<\/a>. Other efforts, like Spearhead, a platform to turn founders into angel investors built by AngelList\u2019s Naval Ravikant and Accomplice\u2019s Jeff Fagnan, appear to no longer be as public or active as before.<\/p>\n

The history of solo GPs<\/h2>\n

Before solo GPs were in the spotlight, they were set aside. LPs weren\u2019t giving lone venture capitalists meaningful capital, but as entrepreneurs with massive networks sought to formalize some of their angel investing operations, the deal sweetened. Add in the fact that platforms like AngelList made it easier and cheaper to set up a fund and handle all associated admin fees, and the jokes started rolling: Anyone with opinions and a following on Tech Twitter could start a fund.<\/p>\n<\/p><\/div>\n

<\/br><\/br><\/br><\/p>\n

Science, Tech, Technology<\/br>
\n<\/br>
\nSource:https:\/\/techcrunch.com\/2023\/03\/25\/venture-capital-solo-gps\/<\/a><\/br><\/br><\/p>\n","protected":false},"excerpt":{"rendered":"

Source:https:\/\/techcrunch.com\/2023\/03\/25\/venture-capital-solo-gps\/ Are solo GPs screwed? 2023-03-27 22:34:46 Entrepreneur Ankur Nagpal raised a $70 million venture fund last year, called Vibe Capital, from over 200 investors. But now, as the market shifts and LPs are less interested in venture capital, the Ocho founder is shrinking the fund side by roughly 43%, canceling capital calls, and, ultimately, […]<\/p>\n","protected":false},"author":1,"featured_media":27634,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"nf_dc_page":"","om_disable_all_campaigns":false,"pagelayer_contact_templates":[],"_pagelayer_content":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[26,17,8],"tags":[],"class_list":["post-27633","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-science","category-tech","category-technology"],"yoast_head":"\nAre solo GPs screwed? - Science and Nerds<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/scienceandnerds.com\/2023\/03\/27\/are-solo-gps-screwed\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Are solo GPs screwed? - Science and Nerds\" \/>\n<meta property=\"og:description\" content=\"Source:https:\/\/techcrunch.com\/2023\/03\/25\/venture-capital-solo-gps\/ Are solo GPs screwed? 2023-03-27 22:34:46 Entrepreneur Ankur Nagpal raised a $70 million venture fund last year, called Vibe Capital, from over 200 investors. 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