For solo GPs, 2024 will be hard—but in ways that are expected

I’ve now been at Fortune and Term Sheet for about two weeks and, as I’ve been having preliminary conversations across the private markets, solo GPs have come up over and over, with the same question: Are solo GPs okay? What are they planning for in 2024? 

So, I decided to ask a few of them. The short answer is, yes, they say they’re okay. But they’re operating with a relatively unique set of challenges—and advantages—in a rough market. 

For one, interest rates be damned, being a solo manager has always had challenges.

“It’s never been particularly easy to be an emerging manager,” said Sarah Kunst, founder and general partner at Cleo Capital. “I think there was a tiny moment, in 2021, maybe 2022, where it was a little bit easier…But there’s always been this sort of dichotomy where, even when it’s a thriving market and a lot of people are raising funds, it’s hard because everyone is competing for the same pool of LPs.”

So that’s the first idea to dispel, that boom times are easy sailing for solo GPs. Still, in a marketplace roiled by geopolitical uncertainty and nervous LPs, you are operating alone. One of the troubles a lone GP has is simple—time. If time is money, your time is all there is to spend, says Banana Capital founder Turner Novak.

“From a fundraising perspective, if you’re a big fund, and have $5 billion in assets under management, you probably have an investor relations team,” he said. “But if you’re a solo GP, that’s one of five or six jobs you have. You have to be a full-time fundraiser, deal-sourcer, investor, and you’re probably also marketing or creating content.”

But though there’s less margin for error, you also have more freedom—which can be helpful when it comes to making decisions quickly amid uncertainty.

“You don’t have to call a board meeting to decide on an investment,” said Masha Bucher, founder and general partner at Day One Ventures. “One of the biggest things in VC that you need to succeed—alongside great access—is your ability to decide really fast.”

Every GP I talked to agreed that this year is going to be difficult for fundraising and great for investing. 

“The irony of venture is that the years it’s easiest to raise are usually the worst years to deploy,” said Cambrian Ventures founder and general partner Rex Salisbury. “I think 2023 was the best year in recent memory to deploy because prices of pre-seed and seed bottomed out…and there are more good founders than ever before.”

All in all, what I got from interviewing a number of solo GPs is that 2024 will be tough, but fears that they’re suddenly on a razor’s edge are overblown—they’re always walking something of a tightrope, with varying degrees of net underneath.

“I love a challenge,” said Sophia Amoruso, founder and managing partner at Trust Fund (and, yes, Girlboss Nasty Gal founder). “Nothing’s ever certain. But if you’re a VC, you thrive on ambiguity, whether it’s investing in early-stage businesses, or trying to fundraise during a time when everyone says that it’s hard. The appetite for risk is essential to the job.”

One last thing…Term Sheet is partnering with Semaphore again for its 16th annual confidence survey of private equity, venture capital, hedge fund, and other professionals. For the curious, a preliminary result: So far, 71% of you say Sam Altman should be running OpenAI. Weigh in; it’s anonymous and should take you 3–4 minutes. You can take the survey here. Have a look at last year’s results here, here, and here.

See you Monday,

Allie Garfinkle
Twitter: @agarfinks
Email: alexandra.garfinkle@fortune.com
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Joe Abrams curated the deals section of today’s newsletter.

VENTURE DEALS

- Lightship, a San Francisco and Boulder, Colo.-based manufacturer of all-electric RVs, raised $34 million in Series B funding. Obvious Ventures and Prelude Ventures led the round and were joined by Allegis Capital, THOR Industries, TechNexus Venture Collaborative, and existing investors Congruent Ventures, HyperGuap, and Alumni Ventures.

- Kashable, a New York City-based platform that provides credit and financial wellness solutions as an employer-sponsored voluntary benefit, raised $25.6 million in Series B funding. Revolution Ventures and Moneta Ventures led the round and were joined by EJF Capital and Krillion Ventures. 

- Recraft, a London, U.K.-based AI graphic design generator, raised $12 million in Series A funding. Khosla Ventures and Nat Friedman led the round and were joined by RTP Global, Abstract VC, Basis Set Ventures, Elad Gil, and angel investors. 

- Kusari, a Ridgefield, Conn.-based security platform designed to repair supply chain vulnerabilities, raised $8 million across pre-seed and seed funding rounds. J2 Ventures and Glasswing Ventures led the seed round and were joined by Unusual Ventures.

- PredictAP, a Boston, Mass.-based platform designed to automate aspects of the invoice process for real estate accounting departments, raised $8 million in Series A funding. RET Ventures led the round and was joined by Wise Ventures. 

- Talofa Games, a San Francisco-based game developer, raised $6.3 million in seed funding. Chamaeleon led the round and was joined by a16z, Basis Set Ventures, Insight Partners, and others. 

- Chronosphere, a New York City-based platform designed to help observability teams resolve incidents before they impact customers, raised $5 million in funding from CrowdStrike.

- Lative, a Dublin, Ireland-based software provider designed to help B2B revenue teams automate the sales planning and execution process, raised $3 million in seed funding. Elkstone Ventures led the round and was joined by Enterprise Ireland, Handshake Ventures, WestWave Capital, and others. 

- Obelisk Studio, a Limassol, Cyprus-based art and video game development studio, raised $2 million in funding from The Games Fund.

PRIVATE EQUITY

- Avenu Insights & Analytics, a portfolio company of Arlington Capital Partners, acquired Finvi’s State & Local Government Division, an Albuquerque, N.M.-based provider of court case management, integrated electronic payments, and other software for state and local jurisdictions. Financial terms were not disclosed .

- CES Power, backed by Allied Industrial Partners, acquired Fourth Generation, a London, U.K.-based provider of temporary power services to live events and the entertainment industry. Financial terms were not disclosed. 

- DexKo Global, backed by Brookfield Corporation, acquired Cerka Industries, a Milton, Ontario-based trailer axle manufacturer and trailer components distributor. Financial terms were not disclosed. 

- Empower Aesthetics, backed by Shore Capital Partners, acquired DermaTouch RN, a Houston and San Antonio, Texas-based medical aesthetic practice, and AW Skin Co., a Murfreesboro, Franklin, and Cool Springs Tenn.-based medical spa and wellness center. Financial terms were not disclosed.

- Fenix Parts, a portfolio company of Stellex Capital Management, acquired Stafford’s Auto Parts, a Montgomery, Ill.-based automotive recycler. Financial terms were not disclosed. 

- Knox Lane acquired a majority stake in Guardian Fire Protection Services, a Rockville, Md.-based provider of fire and life safety services. Financial services were not disclosed. 

- Maysteel Industries, a portfolio company of Littlejohn Capital, acquired Star Precision Manufacturing, a Frederick, Colo.-based full service, sheet metal fabrication, precision machining and complete finishing services company. Financial terms were not disclosed. 

- Southern Home Services, a portfolio company of Gryphon Investors, acquired ACE Solves It All, a Orlando, Fla.-based provider of plumbing, HVAC, and electrical services. Financial terms were not disclosed. 

- Welsh, Carson, Anderson & Stowe agreed to acquire a majority stake in Equilend, a New York City-based fintech platform for the securities finance industry. In December, Fortune exclusively reported that Welsh, Carson, Anderson & Stowe acquired EquiLend for more than $800 million.

EXITS

- Laboratorios Sanfer agreed to acquire Vitalis, a Cundinamarca, Colombia-based manufacturer and distributor of injectable pharmaceuticals, from ACON Investments. Financial terms were not disclosed.

OTHER

- Sekisui House (TKS: 1928) agreed to acquire M.D.C. Holdings (NYSE: MDC), a Denver, Colo.-based homebuilder, for $4.9 billion. 

-LiveRamp (NYSE: RAMP) agreed to acquire Habu, a San Francisco, Calif.-based platform designed for brands and media companies to share customer data with business partners and publishers, for approximately $200 million in cash and stock.  

IPOS 

- CG Oncology, an Irvine, Calif.-based biotech company developing therapies for bladder cancer, plans to raise up to $212.4 million in an offering of 11.8 million shares priced between $16 to $18. ORI Capital, Decheng GP, Longitude Venture Partners, Kissei Pharmaceutical, Foresite Capital, TCG, and Ally Bridge Group back the company. 

- Reddit, a San Francisco-based social media platform, plans to sell approximately 10% of its shares in an IPO in March, per Reuters. The company confidentially filed to go public in 2021, and was valued near $10 billion in a funding round the same year. Reddit is an independent subsidiary of Advance Publications.  

FUNDS + FUNDS OF FUNDS

- Windjammer Capital Investors, a Waltham, Mass.-based private equity firm, raised $1.3 billion for its sixth fund focused on companies in niche markets.

PEOPLE

- Delta-v Capital, a Dallas, Texas and Denver, Colo.-based private equity firm, promoted Garrett Marsilio to partner. 

- Techstars, a Boulder, Colo.-based accelerator, hired Andrew Cleland as chief investment officer. Formerly, he was with Comcast Ventures.