TLDR:
- Co-investments have increased 4-5 times in the past 10 years.
- Collaboration between VCs and LPs is crucial for producing returns.
In the article “The Collaboration Between Limited Partners and Growth Partners: Investors’ Perspective” by Minakshi Sangwan, key insights regarding the changing dynamics in the investment landscape were discussed. According to the India Venture Capital Report 2024, total venture capital funding decreased in 2023 compared to the previous year. Panel discussions highlighted the importance of collaboration between general partners (GPs) and limited partners (LPs) in maximizing returns. LPs are now working closely with VCs on co-investments, operational decision-making, and providing transparency.
Full Article:
In the past 10 years, co-investments have increased 4-5 times, indicating a growing trend in the investment landscape. The collaboration between venture capitalists (VCs) and limited partners (LPs) has become essential for generating returns. LPs are now expected to work together more closely, not only on investments but also on operational decision-making.
An important aspect highlighted in the article is the increasing interest in co-investment opportunities among investors. Over 40% of investors plan to take advantage of such opportunities in the upcoming year. This trend signifies a shift towards more collaborative and transparent practices in the investment industry.
The article also discusses the desire of LPs for GPs to exhibit greater commitment and transparency. LPs are now looking for GPs to commit more to each fund they launch, indicating a growing demand for accountability and trust in the investment process. Additionally, LPs are willing to assist GPs in the secondary market, deepening the level of collaboration between the two parties.
Transparency and communication have been identified as key factors in successful GP-LP relationships. LPs are now requiring GPs to provide detailed information on various aspects of their operations, such as fund leverage and income-to-expense ratios. This trend highlights the importance of building strong partnerships based on trust and transparency.
The article also touches upon the importance of GPs standing out and working closely with LPs to position themselves for success. Rajeev Suri, Managing Partner at India VC, emphasizes the significance of activism and specialization in driving the future of venture capital. By providing support beyond financial backing, GPs can strengthen their relationships with founders and enhance their overall investment strategy.
In conclusion, the collaboration between limited partners and growth partners is crucial for navigating
