Key Takeaways from the 2024 BIP Ventures Shareholders Event

Portfolio

The 2024 BIP Ventures Shareholders event happened on May 2nd. It was the largest gathering in the firm's history, with hundreds of shareholders joining us in person and online, many of our BIP Wealth partners, and a growing team in attendance. As it has been since 2007, the Shareholder's event provided an opportunity to update our community about the progress we have made in the past year and where the firm and our funds are headed.

The leadership team shared information about platform improvements underway. The firm has widened its network and improved access to capital through partnerships and organic growth. We continued to refine and augment the team, building around a dedicated core team of experts that has been together for a long time. In addition to sharing contextual information and performance data for the dozens of companies in the BIP Ventures portfolio, shareholders also got the first look at the companies growing within the BIP Evergreen Venture Fund.

Shareholders gained clarity into the increasingly diversified BIP Ventures investment ecosystem, looking at the benefits of anchor funds, annex funds, mini funds, SPVs, and Evergreen funds. For shareholders, the breadth of vehicles increases options for an investment strategy that aligns with their goals, timelines, risk profile, and diversification needs. For BIP Ventures, the extended fund options deliver information advantages that allow the firm to manage investment risks and produce enduring high-performance outcomes for investors.

The Trends Impacting the Private Market

While BIP Ventures is continuing with trademark consistency and measured growth, the private capital market is struggling, IPOs are starting to show signs of emerging from a frozen period, and a host of other headwinds are creating challenges for VCs and their companies. In particular, Mark Buffington drew attention to specific areas that the firm is navigating on behalf of investors:

  • Persistent high inflation
  • Full employment and a softening job market, particularly in the technology sector
  • Geo-political turmoil leading up to the November elections
  • A looming real estate crisis

Looking at the market at large, we are seeing the outcomes of the confluence of cheap venture capital and high burn rates. Growth rates for private market funded companies have slowed to record rates. The trend drew further contrast between BIP Ventures and the VC sector, as most of the firm's portfolio companies have continued a steady, even if slowed, growth trajectory.

When we make investments and guide companies, we consider product-market fit and business model as far more important than venture capital fueled revenue growth. Pouring VC ‘rocket fuel’ into a rocket works great – but it won’t transform a dilapidated old horse into a highly-tuned race car. (Mark Buffington)

An Overview of Funds and Vintages 

The first half of the event covered the BIP Ventures Early-stage fund through Fund IV. The second half was dedicated entirely to Fund 5, which holds 51 companies ranging in size from Seed to Scale. For each company discussed, Shareholders gained information about performance, customer metrics, leadership changes, and returns (Invested, Fair Value, DPI, TVPI, and IRR).

The key takeaway from the portfolio review is that, despite known and notable headwinds in the private market specifically and the economy as a whole, the majority of the BIP Ventures funds and portfolio companies continue to progress at a healthy rate. BIP Ventures has never espoused a 'growth at any cost' mentality. Instead, consistency, partnership, and targeted support comprise the post-capital relationship. That conservative, hands-on approach is continuing to serve founders and investors well.

Ultimately, Shareholders heard and saw evidence that the focus at BIP Ventures is on investing in company attributes that never go out of style – product market fit, sales efficiency, attractive unit economics, and company competitiveness. And past cycles (e.g., the Great Financial Crisis) show that it's in times of significant economic and geoplolitical headwinds that BIP Ventures shines. The Shareholders who maintain a long-view to investing see those results in three to five years.

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