Dear Investors, Friends of Fitz and other Friends:
In our last newsletter we told you that valuations in the early stage are coming down to more reasonable levels, and that has in fact happened. We have started to see company valuations that reflect real industry and market metrics and have made two new investments. The flip side is that valuations are also coming down for later stage companies, but this has not yet affected any of our portfolio companies, most of which raised substantial new rounds of financing in 2021 and early 2022 when the VC market remained hot. Given the time afforded by the cash most of our portfolio companies have accumulated, we expect them to continue growing into their valuations so that when they are ready to raise another round, it will be at higher valuations. We do continue to closely monitor the cash balances, burn rates and runways of our existing portfolio companies, however. Current gross IRRs across both Fund I (2016 vintage) and Fund II (2019 vintage) average approximately 38%.
Three pieces of news reflected below to which we want to draw your attention are that (i) in August FiscalNote (which had acquired Fitz Gate portfolio company Predata), listed its stock on the NYSE under the ticker symbol “NOTE”, (ii) Fitz Gate II made two new portfolio company investments, in Pixical and Detrapel, and (iii) Fitz Gate I portfolio company Overtime raised a $100M Series D investment round co-led by Morgan Stanley and Liberty Media, one of the largest media companies in the world that owns such sports franchises as the Atlanta Braves and Formula I racing. Overtime also inked its first media streaming deal with Amazon Prime Studios which also invested in the Series D round (more info below).
Finally, Fitz Gate is preparing to raise its next fund. If you are interested in learning more about Fund III, please let us know — we’re excited to discuss our strategy and plans with all our investors and friends.
As always, thank you for your support of Fitz Gate, don’t hesitate to reach out to us, and Happy Holidays!
Mark Poag and Jim Cohen, General Partners
