Cash Dries Up for VC Newcomers
After $329 billion flooded venture capital between 2021 and 2022, the wealthy backers of VC funds are pulling back. “You’ve got to kiss a lot of frogs in this environment” to raise money, says one VC manager.
When Helen Min and Meena Harris started raising money for their debut venture capital fund in January of last year, they expected that their combined 30 years of experience at tech companies would allow them to collect $15 million, a standard first-time fund target. Then interest rates spiked, sending tech stocks careening. By December, when their firm, Phenomenal Ventures, finished fundraising, the duo had raised just $6 million.
“We were like, ‘Oh, this won’t be too difficult,’ but every quarter that went by after [January] it became more and more difficult,” said Min, a former chief marketing officer at startups Plaid and AngelList. Now, Min said, she and Harris—a former lawyer and early Facebook employee—are reconsidering when they should try to raise a second fund, given the prospect of a recession. “There’s so much uncertainty,” Min said.