Last week on VC Twitter — Week of August 4th 2019

VCs thank Jerome Powell for forcing LPs to allocate more money to VC

In SF it is every Patagonia toting venture capitalist’s favorite time of year, Fogust. Here’s what happened last week, there’s some more info about each below:

📉 Fed cuts interest rates

🚔 SEC comes after Rothenberg for $30M in penalties

🥡 Doordash buys Caviar from Square for $410M

🆕 Coatue (hedge fund) starts a $700M early stage fund

💰 Rounds: Wish at $11B + Holloway


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Last Week on VC Twitter

📉 Fed cuts interest rates

Viewed in isolation, this is probably good for venture fund managers. The median venture capital firm might not have the best track record of producing returns, but when other assets classes are yielding ~2% (10Y Treasury Notes), it’s not hard to see why LPs would choose to allocate more money into venture capital (the median venture fund produces 10-15% IRR).

🚔 SEC comes after Rothenberg for $30M in penalties

This is not looking good. Going off of the Techcrunch article, it looks like investor funds were clearly misappropriated and the SEC is now out for their pound of flesh.

Lesson: Don’t defraud your LPs. You will get caught (eventually) and the SEC will come after you

🥡 Doordash buys Caviar from Square for $410M

You might claim this was a great investment on Square since they acquired Caviar for $90M (in an all stock deal), but when we look at the deal terms and rumors it looks more like Square just wanted to unload the unit.

🆕 Coatue (hedge fund) announces a $700M early stage fund

Coatue picks up Dan Rose (new hire, former FB) who joins Arielle Zuckerberg (formerly at Kleiner Perkins) and Matt Mazzeo (formerly at Lowercase). This isn’t entirely unexpected, Axios had a scoop on their $500M raise last November.

Both their existing team and the investments that the firm have made since look solid.

Will more hedge funds start spinning up early stage funds? Let us know if you are thinking of doing so; we can do bulk shipments of VC Starter Kits so that your team is ready to make early stage investments.

💰 Rounds: Wish at $11B + Holloway raises & releases their guide to raising VC

Everyone’s favorite shopping app, ContextLogic (better known as Wish) raised a fresh round of ~$300M at an $11.2B valuation.

Holloway just raised a round and fittingly released their guide to raising Venture Capital