A Look Back at Newcomer's Best Posts in 2022 With the Benefit of Hindsight
Takeaways from the year's top posts
This was the year that the air came out of the balloon.
In the first few months of 2022, we started to get an understanding of the huge fortunes that had changed hands in 2021 — that manic, dying frenzy at the tail end of the bull run. I marveled at the billions that investors had returned to their limited partners and the billions that investors had pushed out the door in 2021.
ICONIQ Capital returned $5.5 billion to its investors and deployed $5.2 billion in 2021.
General Atlantic told its investors that it saw $11 billion in liquidity in 2021.
Meanwhile, we learned that Tiger Global had valued ByteDance at $460 billion valuation.
Coatue bragged to investors about its move to cash, but some of its favorite public companies in the downturn have sunk dramatically.
Then as 2022 progressed, I chronicled the downturn and how investors were pulling back and shifting to early stage deals. I turned to some of the top venture capitalists to understand what was going on. Those interviews included Vinod Khosla, Kleiner Perkin’s Mamoon Hamid, and General Catalyst’s Hemant Taneja.
Read on for easy-to-read summaries of some of Newcomer’s greatest hits in 2022 with quick takeaways from the stories.
Coatue's View of the Market, Or Why Catching a Falling Knife Is Dangerous
An internal slide deck from Coatue revealed its strategy as the market began to shift. The firm saw “zero valuation support” for Robinhood and Lemonade while making the case for Tesla, Nvidia, and Datadog in slides obtained by Newcomer. Tesla’s stock is down 70% so far this year, Nvidia is down 52%, and Datadog has fallen 55%. Robinhood is down 57% and Lemonade fell 68%.
It’s hard to pick winners when everything is sinking.
Coatue’s hedge fund was down 17% this year as of May 17 (while Tiger Global was down 52% and the NASDAQ Composite 29%).
The firm projected positive growth for some companies, like Netflix, that seem correct in hindsight.
Meanwhile, they missed on some other projections, calling Snap a better buy than Pinterest, for example. Snap is down 81% so far this year while Pinterest is down just 35%.
Tiger Global & SoftBank Bet the Farm
Softbank’s huge tech bets came crashing down to earth, and internal slides from Tiger Global paint a picture of the firm’s most important investments and offer some clues as to the predicament that Tiger faced earlier this year.
SoftBank told investors that its two “Vision Fund” investment vehicles had racked up the biggest net loss ever: more than $26 billion for the fiscal year ending March 31.
Tiger’s overall strategy shifted from big checks to smaller, earlier checks — perhaps due to a shortage of available funds after this year’s downturn. The firm has yet to announce another private investment fund.
Tiger was deeply tied up in Chinese tech stocks, including a previously unknown $1.1 billion investment in ByteDance at a $460 billion valuation.
General Catalyst’s Annual LP Note Is Unveiled
An interview with General Catalyst CEO Hemant Taneja leads into the note that Taneja sent to LPs about the firm’s strategy moving forward.
Layoffs and failures will open up smart, driven people to build something new from zero: “You have to free up human capital and capital from ideas that don’t have a great future.”
VCs have a societal responsibility just like anyone else: “As an industry, we think our only job is to spawn companies, ‘disrupt’ markets, deliver strong returns for our LPs and personal wealth for ourselves…and assume society will figure out the rest. This is not the way to build enduring companies or leave a meaningful legacy.”
Exclusive Secondary Market Data, General Atlantic Slides, Structured Equity, and Other Happenings
A secondary shares advisor floats big discounts on startup stocks. General Atlantic saw $11 billion in liquidity in 2021, slides reveal.
In a sign of how the downturn was effecting private markets, a secondary shares advisory firm pitched potential buyers on heavily discounted startup stocks, with companies like Hopin, Noom, and Revolut selling at discounts of 50% or more.
I got my hands on late stage tech investor General Atlantic’s private fundraising materials, revealing that the traditionally conservative firm saw $11 billion in liquidity in 2021. That’s a huge upswing from their returns the past few years.
Structured equity was catching on as a more common investment vehicle at the time, with multiple firms including Coatue raising dedicated funds for the strategy.