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Josh Wolff, a partner at Lux Capital, predicts that “dry powder” will become “wet powder” as venture capital funds choose to back existing portfolio companies in distress. Times To make a new investment. Data from Maps seems to prove his hunch right: Bridge rounds increased in frequency during the last quarter of 2022. Anna
The call for help may come from your own portfolio.
A month ago I warned that it would be a mistake to think that the record level of dry powder we hear about will immediately go to newbies. While it’s true that VCs in the US are sitting on billions, they must commit a significant portion of this capital to support ailing startups that are already part of their portfolio.
That’s why Lux Capital partner Josh Wolff says dry powder is already wet. “All the money raised at the top of a valuation is used to expand the ‘dead walking’ zombie companies that can’t raise money outside and go to insider rounds,” he said.
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