MB on VC: Venture Capital 2023 Year-in-Review and 2024 Outlook

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As another unprecedented year draws to a close, the BIP Ventures team paused to assess challenges and progress. This final MB on VC post for 2023 offers highlights from our year, Venture Capital, and the Innovation Economy at large. Most importantly, 2023 brought up questions about what constitutes a truly sustainable business, the roles of governance and board leadership, and lessons about ethics and integrity. Through these brief reflections, we hope you'll find some points to reflect on and maybe even some lessons to take with you into 2024.

Exercising Discipline Amid Market Inflation

Over the past few years, massive economic stimulus and asset inflation prompted soaring valuations. We responded as we always do, with a lens of experience and rationality. We followed a steady guiding principle and pursued opportunities with discipline.

You have to be very disciplined and pick your spots.

A Lack of Due Diligence Creates Risk

The blistering pace of innovation in 2023 created a sense of euphoria that led even storied VC firms to neglect prudent investment practices. The lessons were swift and wide-ranging. Investment without rigorous and ongoing due diligence is  a disservice to investors and founders. It is a serious misstep with long-term repercussions. (See examples like FTX and Theranos.) Likewise, we saw the importance of governance and ethical oversight play out in front of our eyes. It only reinforced our commitment to fiduciary responsibility and ethical stewardship. We've struck the delicate balance between fostering ambition and applying the rigor necessary to transform vision into reality. It's about guiding, not directing, and ensuring that dreams are honed with the precision that leads to tangible success.

As a fiduciary for our investors and a responsible steward of our founders' dreams, we approach sourcing, diligence, and post-capital support with the highest degree of rigor and integrity. It's how we ensure we can maintain the oversight necessary to protect and guide our investments effectively.

Quality and Return are the Pillars of Scaling

Scaling the firm was a central theme in 2023, with a particular focus on maintaining the high quality and return on investment that have defined our trajectory. Part of the effort included building a Performance Engineering team focused on the challenges and opportunities that founders face as they scale. A core area of this focus is on making sure that innovation extends past technologies to business models. Particularly as the AI hype cycle has ramped up, we've had to be particularly diligent to distinguish substantive innovation from transient fads. It's not enough to ride the wave of popularity; real innovation must be rooted in practical, sustainable business models. BIP Ventures is committed to investing in companies that embody this philosophy.

Process-Driven Success

The most significant achievements for us this year have been in company growth and the advancements we've made in evolving our processes and team. Knowledge is our cornerstone. By enhancing our understanding of what works, we drive better decisions and, consequently, better returns.

As we look forward to 2024, we see a canvas for BIP Ventures to dream and build, grow, and lead with integrity. We maintain a steadfast commitment to the values that have brought us this far. We are positioned to capitalize on market opportunities and to help our growing community of investors to do the same. It's not solely about identifying a promising market but also ensuring that our founders are equipped to seize it for the good of everyone involved. Thanks for joining us on the VC journey this year.

Your fellow investor, Mark Buffington

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