Pockets of the tech ecosystem are flying but, behind the scenes, investors worry how long capital allocators will let them sustain the same levels of funding. “It’s hard to tell how much longer we can keep writing checks at the current pace without seeing some pushback from LPs,” said one GP. “If we see a slowdown in new fund commitments, it could dry up the pipeline of follow-on rounds we’re counting on to support our portfolio companies.” Some GPs are already feeling the squeeze. At a recent conference, a partner at a top-tier venture firm admitted that several of their limited partners have started asking more pointed questions about deployment speed and fund size. Others are quietly trimming check sizes or extending investment periods to avoid over-committing.
The concern is that if LPs pull back, the entire funding stack—from seed to late-stage—could wobble. “We’re not seeing panic yet, but the signals are there,” said another investor. “If the public markets stay choppy, private valuations will eventually have to come down.”.
Source: Sifted · Summarized by HeadlinesBriefing