Venture market deep dive with Beezer Clarkson

**OpenLP from Sapphire Partners** (0:06)
Welcome to Origins, the podcast about the money behind the money. This podcast was created by Notation, a pre-seed venture firm based in Brooklyn, New York.
Beezer Clarkson is a partner at Sapphire Partners, where she leads investments and venture funds domestically and internationally. Prior to joining Sapphire in 2012, Beezer managed the day-to-day operations of the Draper Fisher Jurvetson Global Network, which then had $7 billion under management across 16 venture funds worldwide. In 2016, Beezer led the launch of OpenLP, an effort to help foster greater understanding in the entrepreneur to LP tech ecosystem. You can learn more at openlp.sapphireventures.com. In this episode of Origins, Beezer and I are going to do a deep dive on the current state of the market across the LP and venture ecosystem. Hope you enjoy.
Beezer. Great to have you here. The purpose of this episode is we're going to take a deep dive into the market right now, which is decidedly confusing for perhaps everyone in it. And hopefully, you and then maybe me a little bit at the end, are going to share some light on what we're seeing in it. So thank you for doing this. And I think the best place to start is could you just like give us a sense of where you think we are?

**Beezer Clarkson** (1:45)
Well, first, thank you for having me back. It's always an honor and a privilege and always super fun to chat. And I'm excited to make this a conversation and compare what we're seeing on the LP side of the world to what you're seeing on the ground. There are two different halves to the whole. And then I guess two different halves to the triangle that meets the entrepreneur. But where are we at?
I like what you said about being confusing because we pulled down the first half numbers and there's been more money raised by venture funds in 2022, so far according to PitchBook, than in 2021 And that sounds just so hard to square with what we're seeing with the world slowing down so much, you know, in the macro as well as the specifics in the venture world. It feels very weird that all this money has been raised and yet things are slow and the stock market is, you know, the IPO market is shut, things are tougher. And it's also not, it's what people know or if they haven't read the reports from PitchBook, that money is all going into very large funds. The reason why it's more this year than last year is because, you know, Tiger raised almost 13 billion and people have come back and this was all very first part of the year driven off of momentum from last year.
But even the first time fund numbers at the top line don't look like they're trending the same as last year, which again feels very discordant with how it's actually being deployed right now on the ground. So I think it is confusing.

**OpenLP from Sapphire Partners** (3:09)
So Tiger and the Tiger fund, that was raised at the beginning of this year.

**Beezer Clarkson** (3:14)
Yeah, there were a lot of very big funds raised, either Q1 or Q2, but they were, you know, battery just raised a ton of money and recent has raised very large funds. So you're seeing the mega funds get more mega.

**OpenLP from Sapphire Partners** (3:28)
Tiger deployed all of that money already, basically.

**Beezer Clarkson** (3:33)
That I can't speak to, not being a Tiger LP and also just there's been different reports as to where they are at.
But they raised a fund last in 2021, according to PitchBook, and they raised a larger fund in 2022 So presumably, they had to deploy capital somewhere to raise again. So there's a lot of dry powder.

**OpenLP from Sapphire Partners** (3:51)
So the numbers, I guess you're saying like, and maybe they're also sort of skewed, given all those funds raised at the beginning of the year, but right before the market sort of collapsed.

**Beezer Clarkson** (4:02)
Yes, I think, not to jump to the end of the podcast now, but I think what you're seeing in the first half of the year, there'll be some consistent trend lines over the second half, but you'll see a lot of the other things trade out, meaning I think there's been an LP, I would say, return to names they know, names have been invested in people with established track records, folks have invested in a downturn and have done so profitably.
Which presumes people have been investing for a while. So I think it is going to be much harder for newer funds to fundraise now into the next part of the year. We're also hearing about funds that are not necessarily newer, they're not necessarily emerging managers, but for whatever reason haven't returned a bunch of money during the bull market. I think it's going to be tougher sledding for them. So I think just because a lot of dollars were raised in the beginning of the year does not mean everyone's going to be able to fundraise the second half of the year. I think LPs are reflecting and recalibrating, digesting. As one said to me, it's been a lot of inhale over the last few years, and now it's an exhale. Like what's happening in our portfolio? Where are the valuations?