To raise an opportunity fund this year or to not raise an opportunity fund?

One of the biggest venture capital trends of the last few years was early-stage firms raising “opportunity” funds to make follow-on investments into their most successful bets. But amid a tougher fundraising market that impacts both VCs and startups, muted exit environment and slowdown in late-stage funding, will that trend continue?

Earlier this week, TechCrunch toptechtrends.com/2023/04/05/lux-capital-ditches-its-opportunity-fund-in-latest-fundraise/”>first reported that Lux Capital was raising money. What stood out was the firm ditching its opportunity fund and combining its early- and late-stage strategies into one vehicle that will mainly focus on early-stage deal-making. This came just weeks after Y Combinator toptechtrends.com/2023/03/13/y-combinator-cuts-nearly-20-of-staff-scales-back-growth-stage-investments/”>announced it was pulling back from its late-stage strategy too.

At first, I thought these were just the first few indicators that 2023 would likely be the year the opportunity fund trend dies, but of course, it’s not that simple.

I think whether to raise an opportunity fund will become a much more debated question for firms looking to raise money this year. I think we will see significantly less of them, but there will still be firms raising them with good reason. Khosla Ventures and Canaan appear to be among these: Back in January, Khosla started fundraising for a slate of new funds, including an toptechtrends.com/2023/01/09/khosla-ventures-goes-after-3b-in-new-funds/”>opportunity fund, and on Thursday, Canaan toptechtrends.com/2023/04/06/in-a-slowing-market-venture-investor-canaan-still-closes-850m-across-two-new-funds/”>said it had raised $850 million across two funds, its flagship early-stage fund and a late-stage strategy, my colleague Connie Lozios reported.

toptechtrends.com/2023/04/08/opportunity-fund-should-you-raise/”>To raise an opportunity fund this year or to not raise an opportunity fund? by toptechtrends.com/author/rebecca-szkutak/”>Rebecca Szkutak originally published on toptechtrends.com/”>TechCrunch