The pandemic led to venture capital taking a pretty significant dip at the outset, according to Will Zell, founder of Zell Capital and Executive Chairman at Nikola Labs. But investors, he says, rebounded quickly.
“What you're seeing today across financing, especially in venture capital, is an asset class that's on fire,” Zell says. “So, there's record amounts of capital being invested by institutions into venture capital and record numbers of startups that are raising capital, and we've seen that here in Central Ohio.”
He says it's been a dynamic time in venture capital, which is good, but that comes with its own risks, mainly because many in the market will be investing at what some would argue is the top of the market.
“If you look across venture capital, I would say it’s exuberant to the max,” Zell says.
That’s led some to debate whether or not venture is experiencing a bubble. Zell says the businesses receiving the capital are, generally speaking, real, compared to the companies that gobbled up all the investment during the dot com bubble.
“You're seeing venture capitalists writing more checks and with greater speed and higher conviction,” he says.
Zell is also seeing larger players, such as Tiger Global, bringing billions of dollars into venture capital and pre-empting financing rounds.
“It is getting significantly competitive I would say at the growth stage and that's going to create an interesting dynamic around traditional growth VCs, whether or not they move even further downstream to early stage,” he says.
Zell spoke on the Smart Business Dealmakers Podcast about launching Zell Capital during the pandemic, what he saw from the funding community during that time and how it’s changed since, the relationship between boards and the companies the oversee, the impact of larger players moving downstream, and more. Hit play on the podcast to hear the full conversation.
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