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Bridge rounds took off at the end of last year
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Lux Capital partner Josh Wolfe predicted that “dry powder” would turn out to be “wet powder” as venture capital funds choose to support existing portfolio companies through crude time about making new investments. Data from Carta seems to confirm his hunch was correct: the frequency of bridge rounds boomed in the last quarter of 2022. Anna
The questions for help can come from your own portfolio
A month ago I warned that it would be a mistake to assume that the record levels of dry powder we kept hearing about would automatically go to new startups. While it’s true that VCs are sitting in billions of dollars in surplus in the US alone, perhaps they should spend a large chunk of this capital supporting ailing startups that are already part of their portfolio.
That’s why Lux Capital partner Josh Wolfe says dry powder is actually already wet. “Any money raised on valuation spikes will be spent on prop up ‘walking dead’ zombie companies that cannot raise money from the outside and must instead resort to insider rounds,” he said.
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