With all the chaos that 2020 unleashed, there were (of course) very real impacts to the #VC ecosystem. By diving deep into our portfolio of venture funds comprising 2000+ early stage companies, I was able to tease out some insights into 2020’s disruptive impacts. A thread:

1st takeaway: Among VCs, COVID’s initial impact was a story of winners + losers. Our portfolio value in Q1 was flat quarter-over-quarter. But actually, there was an abnormally strong bifurcation in performance b/w GPs (netting out in aggregate). Like I said, winners + losers!

2nd takeaway: Outlier breakouts are still needed for outsized performance. Among our 3x+ TVPI funds, the top company represents ~50% of the fund’s total value on average. The top two value drivers represent ~60%, and the top three drivers ~70%. Swing for the fences everyone!

3rd takeaway: Investment pacing picked up. Initially our GPs called capital to support strong existing portco's and slowed down new investments. But by summer, GPs were off to the races, making new investments at rates similar to (or sometimes higher than!) pre-COVID rates.

4th takeaway: Domestic geographic diversification took flight. Among our CA-based funds, 43% of new investments were deployed outside of the state, up from 37% in 2019 and only 29% back in 2016. @fredwilson's "Rise of everywhere" narrative confirmed.

To explore the nuance behind our analysis, here’s my full blog: https://sapphireventures.com/blog/the-black-swan-year-how-2020-impacted-venture-investing-and-performance/ #OpenLP