China’s Technology Transformation with Kai-Fu Lee


This post is by HBR.org from HBR.org

China’s entrepreneurs are opening new avenues for innovation in consumer technologies.

Which Countries Have the Most Internet Users?


This post is curated by Keith Teare. It was written by Carmen Ang. The original is [linked here]

Which Countries Have the Most Internet Users?

The Briefing

  • While China and India have two of the largest digital markets worldwide, they also have a ton of untapped market potential
  • India has over 800 million people that aren’t connected to the internet, while China has almost 600 million unconnected citizens

Which Countries Have the Most Internet Users?

When it comes to internet users, some countries have more than others. But a country’s online population doesn’t necessarily reflect its overall connectivity.

To give some perspective, here’s a look at the top nine countries with the highest number of internet users, alongside their internet penetration rates (which is the number of internet users divided by a country’s overall population):

Country Internet Users (2020 Q1) Internet penetration
🇨🇳 China 854,000,000 59%
🇮🇳 India 560,000,000 41%
🇺🇸 United States 313,322,868 95%
🇮🇩 Indonesia 171,260,000 62%
🇧🇷 Brazil 149,057,635 70%
🇳🇬 Nigeria 126,078,999 61%
🇯🇵 Japan 118,626,672 94%
🇷🇺 Russia 116,353,942 79%
🇧🇩 Bangladesh 94,199,000 57%

Based on the table above and this data, it’s clear that some countries, while boasting a high number of internet users, have a long way to go before reaching full connectivity.

Take China, for instance—while the country has the highest number of internet users worldwide, it also has millions of unconnected citizens, making its overall internet penetration relatively low at 59%.

Similarly, India has a massive online community, yet its internet penetration sits at 41%. To give some context, the United States has a 95% internet penetration rate—clearly, the two largest online markets hold a ton of untapped potential compared to others across the globe.

Growth Throughout the Decades

Another way to identify emerging online markets is to look at a country’s internet growth over the years.

While internet adoption has seen an overall increase across the board, a few countries have seen astonishing growth—here’s a look at the top five countries with the largest increases this century:

Country Internet Growth from 2000-2020
🇧🇩 Bangladesh 94,199 %
🇳🇬 Nigeria 63,000 %
🇻🇳 Vietnam 34,250 %
🇮🇷 Iran 27,040 %
🇮🇳 India 11,200 %

No, that isn’t a typo. Bangladesh has seen a 94,199% growth in internet users over the last two decades. And yet, despite this colossal increase, its internet penetration still sits at 57%.

It’ll be interesting to see how these figures change over the next few decades. What will the world’s digital landscape look like in 2050? We’ll have to wait and see.

Where does this data come from?

Source: Internet World Stats
Notes: To calculate internet penetration rate, we divided each country’s total number of internet users by their overall population

Thank you!
Given email address is already subscribed, thank you!
Please provide a valid email address.
Please complete the CAPTCHA.
Oops. Something went wrong. Please try again later.

The post Which Countries Have the Most Internet Users? appeared first on Visual Capitalist.

Which Countries Have the Most Internet Users?


This post is by Carmen Ang from Visual Capitalist

Which Countries Have the Most Internet Users?

The Briefing

  • While China and India have two of the largest digital markets worldwide, they also have a ton of untapped market potential
  • India has over 800 million people that aren’t connected to the internet, while China has almost 600 million unconnected citizens

Which Countries Have the Most Internet Users?

When it comes to internet users, some countries have more than others. But a country’s online population doesn’t necessarily reflect its overall connectivity.

To give some perspective, here’s a look at the top nine countries with the highest number of internet users, alongside their internet penetration rates (which is the number of internet users divided by a country’s overall population):

Country Internet Users (2020 Q1) Internet penetration
🇨🇳 China 854,000,000 59%
🇮🇳 India 560,000,000 41%
🇺🇸 United States 313,322,868 95%
🇮🇩 Indonesia 171,260,000 62%
🇧🇷 Brazil 149,057,635 70%
🇳🇬 Nigeria 126,078,999 61%
🇯🇵 Japan 118,626,672 94%
🇷🇺 Russia 116,353,942 79%
🇧🇩 Bangladesh 94,199,000 57%

Based on the table above and this data, it’s clear that some countries, while boasting a high number of internet users, have a long way to go before reaching full connectivity.

Take China, for instance—while the country has the highest number of internet users worldwide, it also has millions of unconnected citizens, making its overall internet penetration relatively low at 59%.

Similarly, India has a massive online community, yet its internet penetration sits at 41%. To give some context, the United States has a 95% internet penetration rate—clearly, the two largest online markets hold a ton of untapped potential compared to others across the globe.

Growth Throughout the Decades

Another way to identify emerging online markets is to look at a country’s internet growth over the years.

While internet adoption has seen an overall increase across the board, a few countries have seen astonishing growth—here’s a look at the top five countries with the largest increases this century:

Country Internet Growth from 2000-2020
🇧🇩 Bangladesh 94,199 %
🇳🇬 Nigeria 63,000 %
🇻🇳 Vietnam 34,250 %
🇮🇷 Iran 27,040 %
🇮🇳 India 11,200 %

No, that isn’t a typo. Bangladesh has seen a 94,199% growth in internet users over the last two decades. And yet, despite this colossal increase, its internet penetration still sits at 57%.

It’ll be interesting to see how these figures change over the next few decades. What will the world’s digital landscape look like in 2050? We’ll have to wait and see.

Where does this data come from?

Source: Internet World Stats
Notes: To calculate internet penetration rate, we divided each country’s total number of internet users by their overall population


Thank you!
Given email address is already subscribed, thank you!
Please provide a valid email address.
Please complete the CAPTCHA.
Oops. Something went wrong. Please try again later.

The post Which Countries Have the Most Internet Users? appeared first on Visual Capitalist.

How Indian Companies Are Using Technology to Reach New Consumers


This post is by Vijay Mahajan from HBR.org

86% of global consumers live in developing countries.

Visualizing the State of Democracy, by Country


This post is by Iman Ghosh from Visual Capitalist

View the full-sized interactive version of this graphic

Tracking 12 Years of Changes in Global Democracy Levels

Visualizing the State of Democracy, by Country

View the full-sized interactive version of this infographic by clicking here

From Norway to North Korea, governing systems differ around the world. But has the world become more or less free in the past decade?

This visualization from Preethi Lodha demonstrates how democracy levels of 167 countries have changed since 2006. The original data comes from the Democracy Index, which is compiled annually by the Economist Intelligence Unit.

Four Levels of Democracy

First, it’s important to understand the classifications made by the Democracy Index.

Based on answers to 60 questions across a nation’s electoral process, civil liberties, government functions, political participation and political culture, countries are assigned a range of scores in the Democracy Index.

Based on these scores, a nation automatically falls into one of the following four types of governance. Here’s which category fits the bill, depending on the range of scores:

Governance Type Description Example Democracy Index Score
Authoritarian Regime Nations which exhibit frequent
infringements of civil liberties,
unfair elections, and rampant censorship.
🇨🇳 China
🇰🇵 North Korea
🇦🇪 UAE
0.0-3.99
Hybrid Regime Nations with regular electoral
fraud, corruption, and low
political participation,
and suppressed opposition.
🇰🇪 Kenya
🇵🇰 Pakistan
🇹🇷 Turkey
4.0-5.99
Flawed Democracy Nations with fair elections,
underdeveloped political
participation and culture,
with minor issues in civil liberty
and government functions.
🇧🇷 Brazil
🇮🇳 India
🇺🇸 U.S.
6.0-7.99
Full Democracy Nations where political freedoms
are respected with limited
problems, governmental
checks and balances,
and diverse media exist.
🇦🇺 Australia
🇨🇦 Canada
🇳🇴 Norway
8.0-10.0

One thing that stands out is that many hybrid regimes and flawed democracies are also considered high-potential emerging markets, but are held back by their political instability.

Notable Improvements

In recent times, public demonstrations have been a major cause behind increases in Democracy Index scores and changes in governance types.

Algeria moved from authoritarian to hybrid regime in 2019, the only country in the Arab region to do so. This came after sustained protests against the previous president, Abdelaziz Bouteflika—who had served for 20 years.

Chile experienced similar turmoil, for the better. After a spike in the scale of middle class unrest over inequality and unfair policies in late 2019, the political participation moved it up from a flawed to full democracy.

Sliding Countries

The U.S. has one of the oldest democracies in the world. However, it was downgraded from a full to a flawed democracy as of the 2016 index, a status that had been “teetering” since before then, according to the report that year.

Venezuela dropped into an authoritarian regime in 2017, and it doesn’t seem to be improving anytime soon. The state was found to use the COVID-19 pandemic as an excuse to crack down on any dissent against the government.

Global Change in Democracy Levels

All in all, the average global democracy score worldwide emerged at 5.48 in 2019, although it’s clear that certain countries pull this value towards the opposite extremes.

North Korea, an authoritarian regime with a 1.08 score, has remained consistently one of the lowest countries on the index. Meanwhile, its alphabetical successor Norway steadily keeps up its high score streak, with 9.87 being the best examples of a full democracy in 2019.

Here’s how many countries made up each system of governance over the years, and the global Democracy Index score for that year.

Year Authoritarian Hybrid Flawed Democracy Full Democracy Score
2006 55 33 53 26 5.52
2008 52 35 52 28 5.55
2010 57 31 53 26 5.46
2011 54 35 53 25 5.49
2012 52 37 53 25 5.52
2013 51 40 51 25 5.53
2014 52 39 52 24 5.55
2015 52 36 59 20 5.55
2016 51 40 57 19 5.52
2017 52 39 57 19 5.48
2018 53 39 55 20 5.48
2019 54 37 54 22 5.48

Authoritarian regimes peaked in 2010 with 57 countries, whereas the full democracy category peaked in 2008 with 28 countries.

Since 2006, the average global score has slid from 5.52 to 5.48, and the total of countries categorized under full democracy decreased from 26 to 22.

Does this signal an increasingly divided world? And will the global pandemic—which is already delaying elections—have a further pronounced effect on backsliding these democracy scores?

Subscribe to Visual Capitalist


Thank you!
Given email address is already subscribed, thank you!
Please provide a valid email address.
Please complete the CAPTCHA.
Oops. Something went wrong. Please try again later.

The post Visualizing the State of Democracy, by Country appeared first on Visual Capitalist.

What are venture focused Limited Partners are thinking today?


This post is by samir kaji from Stories by samir kaji on Medium

Follow me @samirkaji for my thoughts on the venture market, with a focus on the continued growth with the emerging manager landscape

If it wasn’t clear a few months ago, it is abundantly clear now that not only has the world has shifted immeasurably from COVID-19, but the very definition of what is “normal” is forever changed.

What appeared to be a virtual impossibility back in March, the equity markets have hardly flinched with US equities currently down only ~15% from record highs & the private markets (particularly early/growth) still showing plenty of forward momentum.

However, when the US public markets were down nearly 40% in March, most had assumed that the capital faucet for venture funds and companies would drip dry for the remainder of 2020.

While the capital markets are certainly muted from the 2018/2019 high water points, there are clear signs that capital has not dried up the way many, including myself, predicted — Given the fluidity of the macro environment, this could of course change at any moment.

To understand what Limited Partners are thinking today, we decided to run a short survey with nearly 100 LP’s to understand their current view on allocating to venture funds.

The survey is linked above, but here are a few summary points:

• 44% of the respondents were Family Offices, a function of our focus on building relationships with the type of Limited Partners that have historically been most active in emerging funds.

• The remaining 56% were institutional investors, with the largest majority being Venture Fund of Funds at 33%.

• When I spoke to institutional LPs back in April, very few said they were comfortable allocating to managers they had not built a previous relationship with unless a site visit was conducted. While it remains true that institutional capital is available for only 5–10% of emerging managers, only 10% of institutional LPs definitively conveyed they would not allocate to a new name w/o a site visit (32% said they were not sure). I suspect much of that 32% will move toward finding comfort in doing allocations without a site-visit as it becomes evident that free travel is likely 12–18 months away and many VCs may choose to eschew physical office spaces in the future. I do expect that the intensity of reference checks and Operational Due Diligence to increase to make up for the lack of in-person contact.

• Unlike 2008–2009 when balance sheets were imperiled and the denominator effect created mass over allocation to private equity assets, the current market climate is decidedly different for LPs. Liquidity remains strong and with the reduction of yields in traditional fixed income instruments, venture capital continues to be a compelling haven for those seeking alpha return potential. Note that for the LPs we surveyed, ~10% of total assets were held in venture.

• The fears around widespread defaults on capital calls has not been realized thus far and was further confirmed by our survey — — None of the LPs remarked they had any concern about defaulting on a capital call in 2020 (that said, we have spoken to LPs who have strongly urged GPs to slow deployment; this isn’t surprising as fast deployment and short cycles between funds were a point of contention pre-COVID-19 and a noted pain point in our survey.

• In terms of allocation interest, seed stage firms were the highest area of interest for both institutional and non-institutional investors. Only a small % of institutional firms (15%) noted that backing underrepresented managers were an area of particular focus (note that many of these survey results were conducted in the early days of the George Floyd tragedy and the subsequent spotlight on racial inequity). While we are hopeful this number increases, indicated interest on a survey will mean little without actual allocation activity, which we will eagerly await.

• Confidence in the venture industry remains high at a median of 8 for all investor types. Anecdotally, many LPs I spoke to were more excited about allocating today vs. pre-COVID-19; these LPs cited lower valuations, better investment discipline by managers, stronger corporate governance by companies, and a belief that the pandemic dramatically has accelerated the trajectory of the innovation curve.

If you are a limited partner that actively invests in venture capital and would like access to future reports on the venture industry (or to compare notes on the sector or emerging manager market), please feel free to email me at skaji@firstrepublic.com to be added to the list.

What are venture focused Limited Partners are thinking today?


This post is by samir kaji from Stories by samir kaji on Medium

Follow me @samirkaji for my thoughts on the venture market, with a focus on the continued growth with the emerging manager landscape

If it wasn’t clear a few months ago, it is abundantly clear now that not only has the world has shifted immeasurably from COVID-19, but the very definition of what is “normal” is forever changed.

What appeared to be a virtual impossibility back in March, the equity markets have hardly flinched with US equities currently down only ~15% from record highs & the private markets (particularly early/growth) still showing plenty of forward momentum.

However, when the US public markets were down nearly 40% in March, most had assumed that the capital faucet for venture funds and companies would drip dry for the remainder of 2020.

While the capital markets are certainly muted from the 2018/2019 high water points, there are clear signs that capital has not dried up the way many, including myself, predicted — Given the fluidity of the macro environment, this could of course change at any moment.

To understand what Limited Partners are thinking today, we decided to run a short survey with nearly 100 LP’s to understand their current view on allocating to venture funds.

The survey is linked above, but here are a few summary points:

• 44% of the respondents were Family Offices, a function of our focus on building relationships with the type of Limited Partners that have historically been most active in emerging funds.

• The remaining 56% were institutional investors, with the largest majority being Venture Fund of Funds at 33%.

• When I spoke to institutional LPs back in April, very few said they were comfortable allocating to managers they had not built a previous relationship with unless a site visit was conducted. While it remains true that institutional capital is available for only 5–10% of emerging managers, only 10% of institutional LPs definitively conveyed they would not allocate to a new name w/o a site visit (32% said they were not sure). I suspect much of that 32% will move toward finding comfort in doing allocations without a site-visit as it becomes evident that free travel is likely 12–18 months away and many VCs may choose to eschew physical office spaces in the future. I do expect that the intensity of reference checks and Operational Due Diligence to increase to make up for the lack of in-person contact.

• Unlike 2008–2009 when balance sheets were imperiled and the denominator effect created mass over allocation to private equity assets, the current market climate is decidedly different for LPs. Liquidity remains strong and with the reduction of yields in traditional fixed income instruments, venture capital continues to be a compelling haven for those seeking alpha return potential. Note that for the LPs we surveyed, ~10% of total assets were held in venture.

• The fears around widespread defaults on capital calls has not been realized thus far and was further confirmed by our survey — — None of the LPs remarked they had any concern about defaulting on a capital call in 2020 (that said, we have spoken to LPs who have strongly urged GPs to slow deployment; this isn’t surprising as fast deployment and short cycles between funds were a point of contention pre-COVID-19 and a noted pain point in our survey.

• In terms of allocation interest, seed stage firms were the highest area of interest for both institutional and non-institutional investors. Only a small % of institutional firms (15%) noted that backing underrepresented managers were an area of particular focus (note that many of these survey results were conducted in the early days of the George Floyd tragedy and the subsequent spotlight on racial inequity). While we are hopeful this number increases, indicated interest on a survey will mean little without actual allocation activity, which we will eagerly await.

• Confidence in the venture industry remains high at a median of 8 for all investor types. Anecdotally, many LPs I spoke to were more excited about allocating today vs. pre-COVID-19; these LPs cited lower valuations, better investment discipline by managers, stronger corporate governance by companies, and a belief that the pandemic dramatically has accelerated the trajectory of the innovation curve.

If you are a limited partner that actively invests in venture capital and would like access to future reports on the venture industry (or to compare notes on the sector or emerging manager market), please feel free to email me at skaji@firstrepublic.com to be added to the list.

What are venture focused Limited Partners are thinking today?


This post is by samir kaji from Stories by samir kaji on Medium

Follow me @samirkaji for my thoughts on the venture market, with a focus on the continued growth with the emerging manager landscape

If it wasn’t clear a few months ago, it is abundantly clear now that not only has the world has shifted immeasurably from COVID-19, but the very definition of what is “normal” is forever changed.

What appeared to be a virtual impossibility back in March, the equity markets have hardly flinched with US equities currently down only ~15% from record highs & the private markets (particularly early/growth) still showing plenty of forward momentum.

However, when the US public markets were down nearly 40% in March, most had assumed that the capital faucet for venture funds and companies would drip dry for the remainder of 2020.

While the capital markets are certainly muted from the 2018/2019 high water points, there are clear signs that capital has not dried up the way many, including myself, predicted — Given the fluidity of the macro environment, this could of course change at any moment.

To understand what Limited Partners are thinking today, we decided to run a short survey with nearly 100 LP’s to understand their current view on allocating to venture funds.

The survey is linked above, but here are a few summary points:

• 44% of the respondents were Family Offices, a function of our focus on building relationships with the type of Limited Partners that have historically been most active in emerging funds.

• The remaining 56% were institutional investors, with the largest majority being Venture Fund of Funds at 33%.

• When I spoke to institutional LPs back in April, very few said they were comfortable allocating to managers they had not built a previous relationship with unless a site visit was conducted. While it remains true that institutional capital is available for only 5–10% of emerging managers, only 10% of institutional LPs definitively conveyed they would not allocate to a new name w/o a site visit (32% said they were not sure). I suspect much of that 32% will move toward finding comfort in doing allocations without a site-visit as it becomes evident that free travel is likely 12–18 months away and many VCs may choose to eschew physical office spaces in the future. I do expect that the intensity of reference checks and Operational Due Diligence to increase to make up for the lack of in-person contact.

• Unlike 2008–2009 when balance sheets were imperiled and the denominator effect created mass over allocation to private equity assets, the current market climate is decidedly different for LPs. Liquidity remains strong and with the reduction of yields in traditional fixed income instruments, venture capital continues to be a compelling haven for those seeking alpha return potential. Note that for the LPs we surveyed, ~10% of total assets were held in venture.

• The fears around widespread defaults on capital calls has not been realized thus far and was further confirmed by our survey — — None of the LPs remarked they had any concern about defaulting on a capital call in 2020 (that said, we have spoken to LPs who have strongly urged GPs to slow deployment; this isn’t surprising as fast deployment and short cycles between funds were a point of contention pre-COVID-19 and a noted pain point in our survey.

• In terms of allocation interest, seed stage firms were the highest area of interest for both institutional and non-institutional investors. Only a small % of institutional firms (15%) noted that backing underrepresented managers were an area of particular focus (note that many of these survey results were conducted in the early days of the George Floyd tragedy and the subsequent spotlight on racial inequity). While we are hopeful this number increases, indicated interest on a survey will mean little without actual allocation activity, which we will eagerly await.

• Confidence in the venture industry remains high at a median of 8 for all investor types. Anecdotally, many LPs I spoke to were more excited about allocating today vs. pre-COVID-19; these LPs cited lower valuations, better investment discipline by managers, stronger corporate governance by companies, and a belief that the pandemic dramatically has accelerated the trajectory of the innovation curve.

If you are a limited partner that actively invests in venture capital and would like access to future reports on the venture industry (or to compare notes on the sector or emerging manager market), please feel free to email me at skaji@firstrepublic.com to be added to the list.

What are venture focused Limited Partners are thinking today?


This post is by samir kaji from Stories by samir kaji on Medium

Follow me @samirkaji for my thoughts on the venture market, with a focus on the continued growth with the emerging manager landscape

If it wasn’t clear a few months ago, it is abundantly clear now that not only has the world has shifted immeasurably from COVID-19, but the very definition of what is “normal” is forever changed.

What appeared to be a virtual impossibility back in March, the equity markets have hardly flinched with US equities currently down only ~15% from record highs & the private markets (particularly early/growth) still showing plenty of forward momentum.

However, when the US public markets were down nearly 40% in March, most had assumed that the capital faucet for venture funds and companies would drip dry for the remainder of 2020.

While the capital markets are certainly muted from the 2018/2019 high water points, there are clear signs that capital has not dried up the way many, including myself, predicted — Given the fluidity of the macro environment, this could of course change at any moment.

To understand what Limited Partners are thinking today, we decided to run a short survey with nearly 100 LP’s to understand their current view on allocating to venture funds.

The survey is linked above, but here are a few summary points:

• 44% of the respondents were Family Offices, a function of our focus on building relationships with the type of Limited Partners that have historically been most active in emerging funds.

• The remaining 56% were institutional investors, with the largest majority being Venture Fund of Funds at 33%.

• When I spoke to institutional LPs back in April, very few said they were comfortable allocating to managers they had not built a previous relationship with unless a site visit was conducted. While it remains true that institutional capital is available for only 5–10% of emerging managers, only 10% of institutional LPs definitively conveyed they would not allocate to a new name w/o a site visit (32% said they were not sure). I suspect much of that 32% will move toward finding comfort in doing allocations without a site-visit as it becomes evident that free travel is likely 12–18 months away and many VCs may choose to eschew physical office spaces in the future. I do expect that the intensity of reference checks and Operational Due Diligence to increase to make up for the lack of in-person contact.

• Unlike 2008–2009 when balance sheets were imperiled and the denominator effect created mass over allocation to private equity assets, the current market climate is decidedly different for LPs. Liquidity remains strong and with the reduction of yields in traditional fixed income instruments, venture capital continues to be a compelling haven for those seeking alpha return potential. Note that for the LPs we surveyed, ~10% of total assets were held in venture.

• The fears around widespread defaults on capital calls has not been realized thus far and was further confirmed by our survey — — None of the LPs remarked they had any concern about defaulting on a capital call in 2020 (that said, we have spoken to LPs who have strongly urged GPs to slow deployment; this isn’t surprising as fast deployment and short cycles between funds were a point of contention pre-COVID-19 and a noted pain point in our survey.

• In terms of allocation interest, seed stage firms were the highest area of interest for both institutional and non-institutional investors. Only a small % of institutional firms (15%) noted that backing underrepresented managers were an area of particular focus (note that many of these survey results were conducted in the early days of the George Floyd tragedy and the subsequent spotlight on racial inequity). While we are hopeful this number increases, indicated interest on a survey will mean little without actual allocation activity, which we will eagerly await.

• Confidence in the venture industry remains high at a median of 8 for all investor types. Anecdotally, many LPs I spoke to were more excited about allocating today vs. pre-COVID-19; these LPs cited lower valuations, better investment discipline by managers, stronger corporate governance by companies, and a belief that the pandemic dramatically has accelerated the trajectory of the innovation curve.

If you are a limited partner that actively invests in venture capital and would like access to future reports on the venture industry (or to compare notes on the sector or emerging manager market), please feel free to email me at skaji@firstrepublic.com to be added to the list.

What are venture focused Limited Partners are thinking today?


This post is by samir kaji from Stories by samir kaji on Medium

Follow me @samirkaji for my thoughts on the venture market, with a focus on the continued growth with the emerging manager landscape

If it wasn’t clear a few months ago, it is abundantly clear now that not only has the world has shifted immeasurably from COVID-19, but the very definition of what is “normal” is forever changed.

What appeared to be a virtual impossibility back in March, the equity markets have hardly flinched with US equities currently down only ~15% from record highs & the private markets (particularly early/growth) still showing plenty of forward momentum.

However, when the US public markets were down nearly 40% in March, most had assumed that the capital faucet for venture funds and companies would drip dry for the remainder of 2020.

While the capital markets are certainly muted from the 2018/2019 high water points, there are clear signs that capital has not dried up the way many, including myself, predicted — Given the fluidity of the macro environment, this could of course change at any moment.

To understand what Limited Partners are thinking today, we decided to run a short survey with nearly 100 LP’s to understand their current view on allocating to venture funds.

The survey is linked above, but here are a few summary points:

• 44% of the respondents were Family Offices, a function of our focus on building relationships with the type of Limited Partners that have historically been most active in emerging funds.

• The remaining 56% were institutional investors, with the largest majority being Venture Fund of Funds at 33%.

• When I spoke to institutional LPs back in April, very few said they were comfortable allocating to managers they had not built a previous relationship with unless a site visit was conducted. While it remains true that institutional capital is available for only 5–10% of emerging managers, only 10% of institutional LPs definitively conveyed they would not allocate to a new name w/o a site visit (32% said they were not sure). I suspect much of that 32% will move toward finding comfort in doing allocations without a site-visit as it becomes evident that free travel is likely 12–18 months away and many VCs may choose to eschew physical office spaces in the future. I do expect that the intensity of reference checks and Operational Due Diligence to increase to make up for the lack of in-person contact.

• Unlike 2008–2009 when balance sheets were imperiled and the denominator effect created mass over allocation to private equity assets, the current market climate is decidedly different for LPs. Liquidity remains strong and with the reduction of yields in traditional fixed income instruments, venture capital continues to be a compelling haven for those seeking alpha return potential. Note that for the LPs we surveyed, ~10% of total assets were held in venture.

• The fears around widespread defaults on capital calls has not been realized thus far and was further confirmed by our survey — — None of the LPs remarked they had any concern about defaulting on a capital call in 2020 (that said, we have spoken to LPs who have strongly urged GPs to slow deployment; this isn’t surprising as fast deployment and short cycles between funds were a point of contention pre-COVID-19 and a noted pain point in our survey.

• In terms of allocation interest, seed stage firms were the highest area of interest for both institutional and non-institutional investors. Only a small % of institutional firms (15%) noted that backing underrepresented managers were an area of particular focus (note that many of these survey results were conducted in the early days of the George Floyd tragedy and the subsequent spotlight on racial inequity). While we are hopeful this number increases, indicated interest on a survey will mean little without actual allocation activity, which we will eagerly await.

• Confidence in the venture industry remains high at a median of 8 for all investor types. Anecdotally, many LPs I spoke to were more excited about allocating today vs. pre-COVID-19; these LPs cited lower valuations, better investment discipline by managers, stronger corporate governance by companies, and a belief that the pandemic dramatically has accelerated the trajectory of the innovation curve.

If you are a limited partner that actively invests in venture capital and would like access to future reports on the venture industry (or to compare notes on the sector or emerging manager market), please feel free to email me at skaji@firstrepublic.com to be added to the list.

What are venture focused Limited Partners are thinking today?


This post is by samir kaji from Stories by samir kaji on Medium

Follow me @samirkaji for my thoughts on the venture market, with a focus on the continued growth with the emerging manager landscape

If it wasn’t clear a few months ago, it is abundantly clear now that not only has the world has shifted immeasurably from COVID-19, but the very definition of what is “normal” is forever changed.

What appeared to be a virtual impossibility back in March, the equity markets have hardly flinched with US equities currently down only ~15% from record highs & the private markets (particularly early/growth) still showing plenty of forward momentum.

However, when the US public markets were down nearly 40% in March, most had assumed that the capital faucet for venture funds and companies would drip dry for the remainder of 2020.

While the capital markets are certainly muted from the 2018/2019 high water points, there are clear signs that capital has not dried up the way many, including myself, predicted — Given the fluidity of the macro environment, this could of course change at any moment.

To understand what Limited Partners are thinking today, we decided to run a short survey with nearly 100 LP’s to understand their current view on allocating to venture funds.

The survey is linked above, but here are a few summary points:

• 44% of the respondents were Family Offices, a function of our focus on building relationships with the type of Limited Partners that have historically been most active in emerging funds.

• The remaining 56% were institutional investors, with the largest majority being Venture Fund of Funds at 33%.

• When I spoke to institutional LPs back in April, very few said they were comfortable allocating to managers they had not built a previous relationship with unless a site visit was conducted. While it remains true that institutional capital is available for only 5–10% of emerging managers, only 10% of institutional LPs definitively conveyed they would not allocate to a new name w/o a site visit (32% said they were not sure). I suspect much of that 32% will move toward finding comfort in doing allocations without a site-visit as it becomes evident that free travel is likely 12–18 months away and many VCs may choose to eschew physical office spaces in the future. I do expect that the intensity of reference checks and Operational Due Diligence to increase to make up for the lack of in-person contact.

• Unlike 2008–2009 when balance sheets were imperiled and the denominator effect created mass over allocation to private equity assets, the current market climate is decidedly different for LPs. Liquidity remains strong and with the reduction of yields in traditional fixed income instruments, venture capital continues to be a compelling haven for those seeking alpha return potential. Note that for the LPs we surveyed, ~10% of total assets were held in venture.

• The fears around widespread defaults on capital calls has not been realized thus far and was further confirmed by our survey — — None of the LPs remarked they had any concern about defaulting on a capital call in 2020 (that said, we have spoken to LPs who have strongly urged GPs to slow deployment; this isn’t surprising as fast deployment and short cycles between funds were a point of contention pre-COVID-19 and a noted pain point in our survey.

• In terms of allocation interest, seed stage firms were the highest area of interest for both institutional and non-institutional investors. Only a small % of institutional firms (15%) noted that backing underrepresented managers were an area of particular focus (note that many of these survey results were conducted in the early days of the George Floyd tragedy and the subsequent spotlight on racial inequity). While we are hopeful this number increases, indicated interest on a survey will mean little without actual allocation activity, which we will eagerly await.

• Confidence in the venture industry remains high at a median of 8 for all investor types. Anecdotally, many LPs I spoke to were more excited about allocating today vs. pre-COVID-19; these LPs cited lower valuations, better investment discipline by managers, stronger corporate governance by companies, and a belief that the pandemic dramatically has accelerated the trajectory of the innovation curve.

If you are a limited partner that actively invests in venture capital and would like access to future reports on the venture industry (or to compare notes on the sector or emerging manager market), please feel free to email me at skaji@firstrepublic.com to be added to the list.

Using Reverse Innovation to Fight Covid-19


This post is by Ravi Ramamurti from HBR.org

Global problems call for global solutions.

India: A Historic Crypto Ruling


This post is by jlk from The Barefoot VC

India’s Supreme Court today announced a historic ruling: they overturned The Reserve Bank of India’s 2018 circular that effectively banned cryptocurrency trading, making it illegal for crypto exchanges to link to bank accounts. The Court has now ruled that circular as “unconstitutional”. This has re-opened up the world’s largest democracy, steeped in thousands-year old entrepreneurial culture, to the crypto sector. Just hours before the ruling, I flew back from a week in India meeting with entrepreneurs in the sector – it was apparent over the last week that innovators continued to innovate under adverse conditions, and those that had a mission to provide broader financial access to the world’s (soon to be) largest and youngest population were not dissuaded from building solutions to reach the masses.

In November 2016 I was in India when the government announced their demonetisation scheme – taking large bank notes out of circulation suddenly in an effort to move weed out “black market” cash (and, in my longstanding view, to force more transactions to a mobile/digital format so that they could be more easily tracked). The price of Bitcoin on Indian exchanges instantly traded at premiums to other exchanges, with record volumes. People from all socioeconomic levels saw that the government could deem their hard-earned cash illegal literally overnight, a case study on why a decentralized digital currency like Bitcoin matters. Future\Perfect Venture invested in one of the first Indian cryptocurrency exchanges, Unocoin, that year.

While fintech flourished and the numbers of the unbanked decreased thanks to many government initiatives over the ensuing years, the Reserve Bank of India followed China’s ban on crypto as it threatened their control over monetary policy. Unocoin led a legal challenge to the RBI circular, joined by Wazir (recently acquired buy Binance) and other companies in the space. It’s been a tough couple of years for these entrepreneurs – they should all tell their own stories – but they persevered in bringing financial freedom to their 1B+ fellow citizens. In the end the court ruled that this was a constitutional right, and we should all be thankful that they fought for this right.

The post India: A Historic Crypto Ruling appeared first on The Barefoot VC.

India: A Historic Crypto Ruling


This post is by jlk from The Barefoot VC

India’s Supreme Court today announced a historic ruling: they overturned The Reserve Bank of India’s 2018 circular that effectively banned cryptocurrency trading, making it illegal for crypto exchanges to link to bank accounts. The Court has now ruled that circular as “unconstitutional”. This has re-opened up the world’s largest democracy, steeped in thousands-year old entrepreneurial culture, to the crypto sector. Just hours before the ruling, I flew back from a week in India meeting with entrepreneurs in the sector – it was apparent over the last week that innovators continued to innovate under adverse conditions, and those that had a mission to provide broader financial access to the world’s (soon to be) largest and youngest population were not dissuaded from building solutions to reach the masses.

In November 2016 I was in India when the government announced their demonetisation scheme – taking large bank notes out of circulation suddenly in an effort to move weed out “black market” cash (and, in my longstanding view, to force more transactions to a mobile/digital format so that they could be more easily tracked). The price of Bitcoin on Indian exchanges instantly traded at premiums to other exchanges, with record volumes. People from all socioeconomic levels saw that the government could deem their hard-earned cash illegal literally overnight, a case study on why a decentralized digital currency like Bitcoin matters. Future\Perfect Venture invested in one of the first Indian cryptocurrency exchanges, Unocoin, that year.

While fintech flourished and the numbers of the unbanked decreased thanks to many government initiatives over the ensuing years, the Reserve Bank of India followed China’s ban on crypto as it threatened their control over monetary policy. Unocoin led a legal challenge to the RBI circular, joined by Wazir (recently acquired buy Binance) and other companies in the space. It’s been a tough couple of years for these entrepreneurs – they should all tell their own stories – but they persevered in bringing financial freedom to their 1B+ fellow citizens. In the end the court ruled that this was a constitutional right, and we should all be thankful that they fought for this right.

The post India: A Historic Crypto Ruling appeared first on The Barefoot VC.

India: A Historic Crypto Ruling


This post is by jlk from The Barefoot VC

India’s Supreme Court today announced a historic ruling: they overturned The Reserve Bank of India’s 2018 circular that effectively banned cryptocurrency trading, making it illegal for crypto exchanges to link to bank accounts. The Court has now ruled that circular as “unconstitutional”. This has re-opened up the world’s largest democracy, steeped in thousands-year old entrepreneurial culture, to the crypto sector. Just hours before the ruling, I flew back from a week in India meeting with entrepreneurs in the sector – it was apparent over the last week that innovators continued to innovate under adverse conditions, and those that had a mission to provide broader financial access to the world’s (soon to be) largest and youngest population were not dissuaded from building solutions to reach the masses.

In November 2016 I was in India when the government announced their demonetisation scheme – taking large bank notes out of circulation suddenly in an effort to move weed out “black market” cash (and, in my longstanding view, to force more transactions to a mobile/digital format so that they could be more easily tracked). The price of Bitcoin on Indian exchanges instantly traded at premiums to other exchanges, with record volumes. People from all socioeconomic levels saw that the government could deem their hard-earned cash illegal literally overnight, a case study on why a decentralized digital currency like Bitcoin matters. Future\Perfect Venture invested in one of the first Indian cryptocurrency exchanges, Unocoin, that year.

While fintech flourished and the numbers of the unbanked decreased thanks to many government initiatives over the ensuing years, the Reserve Bank of India followed China’s ban on crypto as it threatened their control over monetary policy. Unocoin led a legal challenge to the RBI circular, joined by Wazir (recently acquired buy Binance) and other companies in the space. It’s been a tough couple of years for these entrepreneurs – they should all tell their own stories – but they persevered in bringing financial freedom to their 1B+ fellow citizens. In the end the court ruled that this was a constitutional right, and we should all be thankful that they fought for this right.

The post India: A Historic Crypto Ruling appeared first on The Barefoot VC.

India: A Historic Crypto Ruling


This post is by jlk from The Barefoot VC

India’s Supreme Court today announced a historic ruling: they overturned The Reserve Bank of India’s 2018 circular that effectively banned cryptocurrency trading, making it illegal for crypto exchanges to link to bank accounts. The Court has now ruled that circular as “unconstitutional”. This has re-opened up the world’s largest democracy, steeped in thousands-year old entrepreneurial culture, to the crypto sector. Just hours before the ruling, I flew back from a week in India meeting with entrepreneurs in the sector – it was apparent over the last week that innovators continued to innovate under adverse conditions, and those that had a mission to provide broader financial access to the world’s (soon to be) largest and youngest population were not dissuaded from building solutions to reach the masses.

In November 2016 I was in India when the government announced their demonetisation scheme – taking large bank notes out of circulation suddenly in an effort to move weed out “black market” cash (and, in my longstanding view, to force more transactions to a mobile/digital format so that they could be more easily tracked). The price of Bitcoin on Indian exchanges instantly traded at premiums to other exchanges, with record volumes. People from all socioeconomic levels saw that the government could deem their hard-earned cash illegal literally overnight, a case study on why a decentralized digital currency like Bitcoin matters. Future\Perfect Venture invested in one of the first Indian cryptocurrency exchanges, Unocoin, that year.

While fintech flourished and the numbers of the unbanked decreased Continue reading “India: A Historic Crypto Ruling”

How Much Money Does the World Owe China?


This post is by Sebastian Horn from HBR.org

An analysis finds 50% of China’s loans to developing countries go unreported.

How Much Money Does the World Owe China?


This post is by Sebastian Horn from HBR.org

An analysis finds 50% of China’s loans to developing countries go unreported.

Research: How Political Connections Help (and Hurt) Chinese Startups

Connections boost credibility but scare away some customers.

How Businesses Should Prepare for Global Internet Access

They’ll need to rethink their business models and platform strategies.