Joe Horowitz is usually a venture capital traditionalist.
He believes in best practices, business fundamentals as well as calculated bets. nevertheless as megafunds as well as hundred-million-dollar rounds balloon valuations as well as flood the space, the Icon Ventures managing general partner finds himself fighting money with money.
“If we don’t adjust to the reality of the implications of what the megafunds mean for us, we’re at risk for our business,” Horowitz told CNBC in an interview. “To be relevant today … you need enough capital.”
Icon Ventures plans to announce the expansion of its most recent fund by an extra $110 million. Icon’s Fund VI had previously closed at $265 million, nevertheless is usually right now getting a 40 percent bump to $375 million in committed capital.
“When we look at the kind of rounds of which we’re invested in — with some of the best firms on the planet — we need more capital,” said Horowitz.
Icon focuses on Series B as well as C rounds, as well as counts successful exits in companies like 41st Parameter as well as Calypto as well as in right now-public companies like FireEye as well as Palo Alto Networks. The firm manages more than $1 billion in total.
nevertheless megafunds like SoftBank are raising the ante, inflating valuations as well as pushing the market toward correction, Horowitz said.
“I have a lot of respect for [SoftBank CEO] Masa Son, nevertheless the notion of $100 billion when success in our world is usually a $20 billion outcome — of which’s a very different business,” he said. “Venture capital is usually more about metering in money at different size financings as the company demonstrates the right kind of progress.”
Icon’s newest financing will help the firm compete, though of which won’t be shifting investment strategy soon. Horowitz said the extra $110 million will be invested in software, security as well as consumer deals — like much of its previous funding.
Icon will also look at the internet of things as well as blockchain applications of which of which finds “compelling as well as legitimate,” Horowitz said.