Dry powder versus wet powder: The numbers have spoken

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Bridge rounds boomed astatine nan extremity of past year

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Lux Capital partner Josh Wolfe predicted that “dry powder” would beryllium to beryllium “wet powder ” arsenic task superior costs opt to support existing portfolio companies done rough times complete making caller investments. Data from Carta seems to corroborate that his hunch was right: The wave of span rounds boomed during nan past 4th of 2022. — Anna

The calls for thief mightiness beryllium coming from your ain portfolio

One period ago, I warned that it would beryllium a correction to presume that nan grounds levels of barren powder we kept proceeding astir would automatically spell to caller startups. While it is existent that VCs successful nan U.S. unsocial are sitting connected billions successful overhang, they mightiness person to dedicate a ample stock of this superior to supporting ailing startups that are already portion of their portfolio.

This is why Lux Capital partner Josh Wolfe says that barren powder is really already wet. “All nan money raised astatine valuation peaks will get spent propping up ‘walking dead’ zombie companies that can’t raise extracurricular money and alternatively person to move to insider rounds,” he said.

Editor: Naga

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