Mark Suster: Why Private Equity Will Replace IPOs and M&A as the Exit Path | E1147

ℹ️ EPISODE INFO

Released

May 1, 2024

Duration

59m

Channel

The Twenty Minute VC

Watch on YouTube

▶ Open ↗

📝 EPISODE DESCRIPTION

Mark Suster is a General Partner @ Upfront Ventures, one of LA’s leading early-stage venture firms. Prior to leading Upfront, Mark was a serial entrepreneur having founded two software companies, selling both with the last selling to Salesforce.com. Mark is also a prolific writer and one of his favourite pieces, Lines Not Dots is one for the ages. ----------------------------------------------- Timestamps: (00:00) Intro (03:00) Entry into Venture (04:06) Founders vs. Operators (08:22) Navigating Challenges with Experience (15:36) Founders' First Close Strategy (19:26) Institutions vs. Personal Networks (20:44) LP Influence in Fundraising Dynamics (25:49) The Misconception of IPO Liquidity (38:13) Investors’ Transition from Software to Hard Tech (40:10) M&A Landscape Evaluation (48:33) Biggest Investing Mistake (52:59) Concerns over Potential US Election Outcome ----------------------------------------------- In Today’s Episode With Mark Suster We Discuss:

1. From Serial Entrepreneur to Leading VC: How Mark made his way into the world of venture having sold two prior companies? What does Mark know now that he wishes he had known when he started in venture? What advice does Mark give to all young investors starting their career today?

1. How to Raise a Fund: What are Mark’s single biggest lessons from 15 years of fundraising for funds? Should managers look to institutions or friends and family first? Are LPs sheep? Do institutions anchoring funds lead to many others jumping in? What is the right amount to do a first close on? What is the right way to message the first close? What are the single biggest mistakes Mark sees managers make when raising?

1. Exit Environments are F******: What Now: Why are IPOs not the liquidity events that everyone thinks they are? When does Mark believe IPO windows will open again? How does Mark evaluate the M&A landscape today? With little M&A and IPO activity, why does Mark believe private equity will step into their shoes? With the change to private equity being the buyer, what does that mean for the sale price of the assets? What does that mean for the future of venture returns?

1. Trump, The Woke Left and The World Around Us: Is Mark concerned about the potential of Trump winning the election? Would Mark rather a Biden administration as the alternative? Why is Mark so worried by the woke left? Does Mark always believe there has been this deep-seated anti-semitism in the US education system? What can be done to remove this from our education system? ----------------------------------------------- Subscribe on Spotify: https://open.spotify.com/show/3j2KMcZTtgTNBKwtZBMHvl?si=85bc9196860e4466 Subscribe on Apple Podcasts: https://podcasts.apple.com/us/podcast/the-twenty-minute-vc-20vc-venture-capital-startup/id958230465 Follow Harry Stebbings on Twitter: https://twitter.com/HarryStebbings Follow Mark Suster on Twitter: https://twitter.com/msuster Follow 20VC on Instagram: https://www.instagram.com/20vchq Follow 20VC on TikTok: https://www.tiktok.com/@20vc_tok Visit our Website: https://www.20vc.com Subscribe to our Newsletter: https://www.thetwentyminutevc.com/contact ----------------------------------------------- #20vc #harrystebbings #marksuster #upfrontventures #ceo #founder #venturecapital #startup

🎤 SPEAKERS

• Mark Suster

  guest

• Harry Stebbings

  host

🧾 EPISODE SUMMARY

In this episode of The Twenty Minute VC, featuring Mark Suster and Harry Stebbings, Mark Suster: Why Private Equity Will Replace IPOs and M&A as the Exit Path | E1147 explores mark Suster Predicts Private Equity-Dominated Exits After Unicorn Bust Mark Suster discusses the long overhang from 2021’s extreme venture valuations, arguing it will take at least another five years to fully correct and that many unicorns are fundamentally overvalued. He explains why private equity and secondaries will increasingly replace IPOs and big-tech M&A as the primary exit paths, making entry price discipline and capital efficiency more critical than ever. Suster shares detailed lessons on fundraising from LPs, reserves strategy, and the psychology of selling into frothy markets versus buying in downturns. He also reflects on the emotional burden of being a GP, the rise of fraud and founder misconduct, and, separately, offers candid views on antisemitism, Israel, and campus politics.

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