6 first-time funds see an advantage in entering recession without large portfolio – Meczyki.Net

Who will do better in the current enterprise downturn?

Will it be legacy investors with years of experience gathered through multiple market cycles – but who also have a large portfolio to worry about – or budding managers who are looking at the market with fresh eyes and a clean slate? We’re about to find out.

The fund closed for the first time last year, a record 270, according to pitchbook dataWhich means there are about 300 budding managers who have raised their funds in a bull market and are now deploying it in very different market conditions.

We chose six funds for the first time to understand how this group of investors is tackling the downturn.

Several first-time fund managers, such as Giuseppe Stutto, co-founder and managing partner of 186 Ventures, a Boston-based early-stage generalist fund, told Meczyki.Net that entering a recession with a very small current portfolio could serve as a big advantage. Is.

“We don’t carry any items that may have come with past funds or tied up in a lot of capital that seems to be an overly valuable vintage,” Stutto said. “Like a founder who sees the world differently than subject matter experts, we (first-time managers) bring a fresh perspective on how certain problems and industries are evolving.”

Leslie Feinzig, founder and CEO of Graham & Walker, a fund that supports early-stage digital startups, said that even though it began investing its funds during a bull market last year, the company’s potential downstream The focus on risk was key – as a first-time fund manager, she could not jeopardize her budding track record in any way.

“The big advantage is that we don’t have many prior investments that are now high-risk, and we don’t have to spend much of our time trying out the portfolio,” Feinzig said. “I can focus almost entirely on the way forward.”

Because these investors have a smaller garden, as they say, they can focus more on ensuring that the new companies they add to portfolios are more resilient to current market trends.

One thing is that these managers are better equipped to help them with their portfolio planning for the runway. While 186 Ventures began investing in the fleeting days of the bull market, expansion financing was not a big part of the conversation, but it is now clear that startups will be a challenge, said Stuto, with 186 Ventures planning more on this. is to focus. Ensuring that its investments allow it to last for a very long time.

“Bridge financing was readily available last year, so it was easy to wave by hand whether you would be able to attract new investors in a ‘modest’ round,” he said. “Part of our thesis now is that this bridge financing will likely not be available, so depending on the industry and who the other financing partners are, we have increased our ‘market readiness’ limit.”

Ariana Thacker, founder and solo GP of Conscience VC, concurred, saying that while she’s still looking for startups of the same kind, she’s definitely pushing for deals that would result in the company having more than 24 million new startups. Has a runway of 36 months.

Read the full survey here to get their full attention on what they’re doing to prepare for the recession, how their approach to investing has changed, and how to pitch them.