The 4.3 Trillion Dollar Problem: Why Venture’s Liquidity Crisis Is Here to Stay with John Rikhtegar and Peter Walker

**John Rikhtegar** (0:01)
When the ATM started coming out, people thought that bank tellers worldwide are essentially going to get decimated because it's going to completely make the job of the bank teller completely obsolete. What in turn actually happened is more bank tellers were hired because there were more branches that were opened because it made the branches more efficient.

**Matt Cohen** (0:17)
Welcome back to Tank Talks. I'm your host, Matt Cohen, founder and managing partner of Ripple Ventures. And on this week's episode, we are sharing a special recording we did during Toronto Tech Week after our Ripple Ventures AGM in Toronto. Our team partnered with the incredible team Carta to host an intimate LPGP conversation at Moomoo Canada's flagship store in Yorkville. The evening brought together leading venture firms, institutional LPs and family offices for a candid discussion on the state of the markets. I had the privilege of moderating a fireside chat with Peter Walker, Senior Director of Insights at Carta and John Rikhtegar, an experienced venture investor and Vice President and Northleaf Capital Partners. As we explored what LPs are really looking for in this funding environment, how GPs are adapting their strategies, pacing and portfolio construction, as well as data-driven insights from Carta on valuations, deployment and liquidity as the evolution of Canadian venture happens across borders. In this episode, you'll hear the full fireside chat and audience Q&A from that evening. A big thank you to the teams at Carta and Moomoo Canada for partnering with us and making the evening even possible. Now, let's jump into the tank for this week's episode with Peter and John.
So maybe we'll just do a quick round of introductions. John Rikhtegar, why don't you go first and then Peter, over to you.

**John Rikhtegar** (1:28)
Yeah, thanks, Matt. Name's John Rikhtegar, Vice President of Northleaf Capital Partners. Been there for a month and a half before Northleaf closed with RBC. Big partners of Matt and the team at Ripple. Then prior to that, I was an operator both in the United Kingdom and Canada. I worked for Shopify for a small period of time, but looking forward to the discussion here. Awesome.

**Peter Walker** (1:45)
Peter? I'm Peter Walker. I run the Insights team at Carta. We are 60,000 US venture cap tables strong and just over 3,000 US venture funds and many, many globally as well. So it's my job to take the data from those companies, those funds and those allocators and it makes sense of it for people. So that's my job.

**Matt Cohen** (2:04)
Awesome. You haven't subscribed to Peter or John on LinkedIn. Definitely check them out. They write some amazing stuff. Just a couple things we're going to talk about high level, but we'll get into very specifics. What are LPs looking for? GPs adapting to the current environment where the valuation liquidity sits and also the cross-border ecosystem that we're all a part of. So in terms of what LPs are looking for, I want to set the stage because you guys obviously know the data better than I have. We're going through a hard reset from where we came out of, obviously in the 2021 Zerp era, 2022 a little bit coming off and then full falling flat on our face, essentially in 2023
I think the conversation that I'd like to ask both of you is, as we start to come out of this reset, it feels like we're still in 23 from the ways in which LPs are looking at GPs, but the dollars coming into the ecosystem don't feel like we're actually at the very bottom.
What is it that you guys are seeing that LPs are judging GPs on now, that they would have never judged them on before, let's say in the 2021 ZERP era, and how much that is going to change even more for either GPs like ourselves or ones that have been around for several years, if not decades? John, I'll start with you.

**John Rikhtegar** (3:15)
Yeah, that's a good question. Let's have the LPs start first. Maybe two ways to answer that question. I think one is, and I don't necessarily think this is table stakes, but I do think trust is very important, and what I mean by that is...

**Peter Walker** (3:26)
Trust is not table stakes, is what I'm doing.

**John Rikhtegar** (3:28)
Trust would seem to be table stakes, but I think it's actually really important as a reason as to why LPs are allocating venture now.
Peter and I were in Halifax two days ago, and one of the things that we spoke about was why LPs are allocating venture today.
Specifically, if you think about the discrepancy between the dollars going to establish funds versus emerging funds, the question that we got asked is, why are emerging managers getting such a brunt of the stick in terms of capital allocation right now?