The venture firm just pulled a major power move. It announced in a simple post on its website that it has just closed a $4 billion fund.
Any market would notice the fund. It is a large amount of money. At a time when SoftBank and Tiger Global Management are low on capital, it must be particularly sweet for the firm, which now employs around 100 investors and 200 employees across offices in San Francisco, Palo Alto, London.
If the market is going through a reset and not a long correction, the timing could hardly be better. It's only a question of whether it should have scaled back its ambitions. A spokesman for the firm pointed us to the firm's post on its website.
It wouldn't be the first time that the company gave money back to its investors. After the tech market soured in the spring of 2000 and the fund size was reduced to $950 million, limited partners began to complain.
Considering what happened next, it's highly unlikely thatLPs will push back this time. One $700 million fund would be used to invest as planned and the other $700 million fund would be used to invest in 2004. The majority of the people who voted against that idea are kicking themselves.
Chris was an investor for the endowment fund. After the kerfuffle over the 2001 fund, he passed on the next fund. One of the best-performing venture funds of all time was it. He told this reporter in 2016 that he was not on their speed dial.
Accel closes on $3B across three funds as it ramps up global investing
It is hard not to wonder how much better the returns would be if it had raised less in the past.
It rolled out $3 billion in funds across a $650 million early-stage U.S. fund and seven early-stage European and Israeli funds. The $4 billion global late-stage fund is intended to invest in companies that have closed previous venture rounds.
They are getting deployed fast and are enormous venture funds. The previous global late-stage fund closed in December of 2020.
The company has seen some big returns. According to reports, it returned $4.7 billion to its limited partners after it listed on the New York Stock Exchange in February. Crowdstrike's market cap is $38 billion despite the fact that tech shares are tanking. Even though their overall assets may have been hit hard by broader market conditions, investors signed up for this newest fund because they wanted to.
Time will tell if or not the bigger the funds, the harder it is to produce larger returns.
The firm seems to be benefiting from the strategy as it has grown more integrated. The India team is responsible for raising their own early-stage funds while the London team is responsible for raising their own late-stage funds. Each team can use the newest fund to make late-stage investments, but they will also be responsible for generating the returns.
It makes sense in a world where companies are springing up all over the place. The profits from the sale of India's Flipkart to Walmart were used to benefit everyone who worked for the company.
When UiPath went public, it was the same thing. The entire partnership has been enriched by the success of UiPath.
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