VC Coverage?
How common is it at BB/EBs to have dedicated VC coverage bankers? It appears that some do, some don't, which is surprising given the meteoric growth in the overall size of the VC asset class, number of uni- and deca-corns overall, and the percentage of those companies that stay private far longer than they used to.
If sponsor coverage makes sense / isn't redundant to the industry bankers covering the portfolio companies, why isn't VC coverage more established?
So we've had this discussion many times through the last decades. Someone almost always brings this up because they read about some great exit or some news article on Techcrunch, along with the magic ROI multiples.
- Some funds, i.e. SWFs, may have impact and VC type coverage teams, even down to geographic and sector level detail around the world
- VC units typically have a different appetite for risk; this is not always compatible with what the fund, IB BU would normally do
- VC normally requires a different kind of professional; the network of each individual is relevant to find the right document, person or background at the crucial moment in time - not always a given with regular IB folks
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Because VC cheque sizes tend to be much smaller than typical sponsor group deals, it's a waste of time to cover them
Check sizes? That's equity private placements, and since most banks have teams dedicated to those deals, the check sizes clearly are big enough to matter.
VC coverage bankers stay on top of the funds to spot financing/M&A opportunities among the funds' portfolio companies.
As you just stated, not all equity private placements are VC and vice versa. As for the second paragraph, I've never heard of that
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