Summary:
New York is becoming a major player in the venture capital scene, rivaling Silicon Valley.
Ben Sun emphasizes the shift in talent and the emergence of successful startups.
LPs are diversifying investments across multiple New York funds, indicating a robust ecosystem.
Geography is less relevant as firms like Thrive Capital find success globally.
The future of venture capital is uncertain, with a predicted bifurcation between large and small funds.
New York's Unique Flavor in Venture Capital
While Silicon Valley might be synonymous with tech innovation, New York has carved out its own niche. On a chilly January morning, I visited Asymmetric Capital Partners to discuss the future of the venture capital industry with leading VCs in the city, all while enjoying a delicious bagel from Apollo.
A Changing Landscape
Ben Sun, cofounder of Primary Venture Partners, shared his journey of launching a social media platform in the 1990s, highlighting the shift in talent perception in New York. Once overlooked, the city is now home to successful startups like MongoDB and Datadog. This shift has transformed New York into a beachhead for venture capital, enabling firms to discover opportunities in overlooked regions such as Texas, Chicago, and Miami.
The Rise of Unicorns
As LPs (Limited Partners) seek exposure to this burgeoning ecosystem, New York has attracted significant investment. Heather Hartnett, CEO of Human Ventures, pointed out that LPs are diversifying their portfolios by investing in multiple New York funds at various stages, indicating a fully developed ecosystem.
San Francisco's Resurgence
Despite a resurgence in San Francisco driven by AI advancements, even traditional firms are feeling competition from players like Thrive Capital. Joshua Kushner has positioned Thrive as a global venture firm, emphasizing that geography is becoming less relevant in the quest for lucrative deals.
The Future is Uncertain
Looking ahead, the venture capital landscape remains unclear. As firms grapple with the aftermath of the pandemic, Lerer Hippeau predicts a bifurcation in the industry: larger firms acting as asset gatherers and smaller, specialized funds. This dynamic makes early-stage investments increasingly competitive, as highlighted by Rob Biederman from Asymmetric, who cautioned against backing just any AI startup without insider knowledge.
Innovation is Key
While New York's tech scene is thriving, firms must continue to innovate amidst growing competition. Just like Apollo's bagels, which are made with sourdough, the key to success lies in staying ahead of the curve.
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