March 4, 2024

Why not put the capital to work when it is actually worth something?

One easy complaint When it comes to venture capital it is often not the case. Venture OS, that is. It is definitely a capital.

Over the past decade, for example, a significant portion of venture capital investment has gone to software-as-a-service companies, and some less risky private technology firms. Sure, some fail, but the SaaS model tends to be permanent, and its performance can be traced to the point that anyone with a pencil can model future growth and come to an evaluation conclusion.

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Where are the adventurous adventures in space factories, super food and the like? Sorry – I got DocuSign instead.

But not all money is shy, even if we find the current lack of physical bets on megaprojects disappointing. No, some funds are weathering the downturn by amassing huge new venture vehicles to invest in markets that don’t look healthy from an outside perspective. In a sense, this is an actual venture capital activity, where investors take their money on an adventure into parts – and market conditions – that are unknown.

This makes recent money from Sequoia Capital China and a16z more interesting to talk about. And why their returns could be sweeter.

chirping while others zig

In short, the news: Sequoia Capital China is raising a massive new fund. This means that the Sequoia crew is preparing to spend an amount of cash for the bank in the country. Welcome news, sure, to China’s beleaguered tech ecosystem A slowdown in growth and an increase in layoffs were observed. But why now? One reason may be that the Chinese tech market is trapped.

Next up: the a16z’s new massive encoder box. Valued at about $4.5 billion, it’s the company’s largest to date, and like the Sequoia Fund, could represent a material part of funding for an upcoming project of the select market, Web 3.

With the venture capital market and technology industry in China suffering and the cryptocurrency industry experiencing rapid climate change from NFT Summer to Meltdown Winter, investors with a thesis on both areas of investment are raising huge new funds.

Why reverse the market? Because that’s – probably – at least – where the money is.

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