When deciding to launch a new fund, the question had to be asked… “Why is it the right time?”.
The answer, which is good news for those who invest in, or are in Venture Capital, is that VC has consistently been able to outperform the public market, especially during economic downturns.
One of the most notable economic crisis’s of the past decade and a half is the housing-bubble explosion of 2008. The crash of 2008 saw the US’s GDP fall by 4.3%, making it the sharpest recession over the past half century. This downturn caused the bleeding of most industries to almost unrecoverable levels. Venture Capital however saw light quickly and was able to recover and continue growth. The VC industry saw a total recoup of investment value plus a nearly 22% increase from the height of the 2008 bubble in less than 3 years (Statista, 2022). Historically, this same downturn and relatively quick bounce back in the VC has become a staple of the industry which is why even though this happened a long time ago, it is relevant today. This same trend is occurring once again from the Covid hit in 2020 as well as with the issues we are facing in mid-2022.