01: State of Venture Capital 2024 with Arjun Arora

01/25/24 • 43 min

We're all discussing current market conditions - valuations, AI hype, fundraising challenges... Before we kick off our planned interview series on First Funders, we sat down with our friend Arjun Arora to discuss the Trends in Venture Capital 2024. As investors, we always look ahead, making this a great way to start 2024.

Highlights from our discussion:

What to expect in round sizes and valuations
Anticipated returns from the AI hype
The significance of data-driven decision-making for VCs
The rise of hyper-specialized funds

You can read the full report here: https://www.arjundarora.com/trends-report

This is for information purposes only. This is not investment advice.

Topics

(00:00) - 01: State of Venture Capital 2024 - Arjun Arora
(00:49) - Guest: Arjun Arora on the State of Venture Capital 2024
(01:24) - Arjun's Founder Background
(03:03) - Format One and how they help founders
(04:41) - Are Mega-deals only happening in AI?
(06:07) - How should early-stage investors consider exit strategy?
(08:02) - Is AI coming for venture capitalists?
(10:36) - Social signals inform investors about founders AND teams
(11:51) - Later-stage investors use prior investors as a signal
(13:57) - Are crowd-funded companies legit investments?
(16:01) - Do funds focused on a niche limit returns and increase risk?
(22:25) - Don't go chasing Unicorns?
(26:41) - Where's crypto and blockchain?
(27:27) - Do founders want to do one-and-done raises?
(29:17) - Can seed funds less power law, higher average outcomes?
(31:45) - Will AI generate returns for investors?
(33:35) - Advice for founders in this market environment
(35:21) - Key Take aways: What we learned from Arjun's report for our own seed investing strategies
(43:00) - Outro

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Highlights from our discussion:

What to expect in round sizes and valuations
Anticipated returns from the AI hype
The significance of data-driven decision-making for VCs
The rise of hyper-specialized funds

You can read the full report here: https://www.arjundarora.com/trends-report

This is for information purposes only. This is not investment advice.

Topics

(00:00) - 01: State of Venture Capital 2024 - Arjun Arora
(00:49) - Guest: Arjun Arora on the State of Venture Capital 2024
(01:24) - Arjun's Founder Background
(03:03) - Format One and how they help founders
(04:41) - Are Mega-deals only happening in AI?
(06:07) - How should early-stage investors consider exit strategy?
(08:02) - Is AI coming for venture capitalists?
(10:36) - Social signals inform investors about founders AND teams
(11:51) - Later-stage investors use prior investors as a signal
(13:57) - Are crowd-funded companies legit investments?
(16:01) - Do funds focused on a niche limit returns and increase risk?
(22:25) - Don't go chasing Unicorns?
(26:41) - Where's crypto and blockchain?
(27:27) - Do founders want to do one-and-done raises?
(29:17) - Can seed funds less power law, higher average outcomes?
(31:45) - Will AI generate returns for investors?
(33:35) - Advice for founders in this market environment
(35:21) - Key Take aways: What we learned from Arjun's report for our own seed investing strategies
(43:00) - Outro

Connect with Us

Follow the First Funders Podcast

Newsletter with behind-the-scenes access and key takeaways

Twitter/X @shaherose

Twitter/X @avirani

Email us with feedback and suggestions on topics and guests

Previous Episode

About the Hosts: How they got into Seed and Angel Investing

Before you dive into our archives or the next episode, learn about First Funders and its hosts, Shaherose Charania and Aamir Virani.

You'll hear about Shaherose's background as a startup builder turned VC who started as a product marketer and how she started Women 2.0, a startup ecosystem, and Founder Labs, a tech incubator. She also reviews her time at Nike, where she built their first incubator, and her role as an angel investor and now Venture Partner at Cake Ventures.

Aamir then shares his experience as an engineer turned product management leader at Dropcam, which was acquired by Google/Nest, and then his turn as a venture capitalist at Felicis Ventures. Why did he end up back as an angel investor and operator? What types of investments does he look for now?

This is for information purposes only. This is not investment advice.

Topics

(00:00) - About the Hosts and their Angel and Seed Investing backgrounds
(01:13) - How Shaherose went from operating to building Women 2.0 to funding startups
(03:26) - Aamir's Journey from Founder to VC to Angel Investor
(06:06) - Outro

Connect with Us

Follow the First Funders Podcast

Newsletter with behind-the-scenes access and key takeaways

Twitter/X @shaherose

Twitter/X @avirani

Email us with feedback and suggestions on topics and guests

Next Episode

02: 300 startup investments, 500 LPs, sharp elbows - Jenny Fielding, Everywhere Ventures

Jenny Fielding, a pre-seed investor and angel with 300 early-stage startup investments, discusses investing in FinTech, hard tech, and consumer spaces over the past decade. From studying law to working in finance to leaving it all to found not just one but two startups, Jenny brings a founder-operator mindset to her fund, Everywhere Ventures. She writes pre-seed and seed-stage checks for $50k to $250k.

Highlights from our discussion:

Jenny’s first seed investment and its fast, huge outcome
Her simple evaluation framework for startup companies and their founders
The way larger funds can screw early angel investors
Everywhere Ventures’ latest seed investment comes out of stealth
A yearly ritual to become a better angel and startup investor

This is for information purposes only. This is not investment advice.

Topics

(00:00) - 02: Jenny Fielding - Everywhere Ventures
(03:07) - How does Shaherose know Jenny?
(04:17) - Jenny's Journey into Investing
(05:10) - Why did Jenny choose the investor side of the table?
(08:27) - How did Jenny land her first investment (which went big!)?
(11:02) - How does Jenny evaluate companies?
(15:39) - How Jenny categorizes companies and check sizes
(17:49) - How an angel investment went public and yet Jenny got nothing
(25:18) - How does Jenny maintain authentic relationships while seed investing?
(29:38) - Seed investors promise access to founders - does it matter?
(33:39) - Jenny's successful seed investment in a Blockchain company - for real!
(37:53) - Angel invest and chill? What signals help assess your investment early?
(39:26) - How Jenny seed invests and then helps with future fundraising
(40:46) - Using secondaries to generate returns and lower risk
(44:18) - Pre-Seed fund return profiles - what's the goal and reality?
(46:14) - Jenny and Everywhere seed invest in the "table stakes economy"
(47:21) - What is the difference between pre-seed and seed startup investment rounds?
(48:56) - Does valuation discipline matter for early angel and seed investors?
(51:44) - Jenny's latest seed investment: Fora comes out of stealth
(53:47) - Jenny's one trick to become better at startup investing
(55:43) - How Jenny partners with Scott to make investment decisions
(57:00) - Jenny's hot takes
(58:21) - Takeaways from the interview