Difficulty in finding new investments hampers Vietnam’s VCs in raising follow-on funds

Venture capital fund managers in Vietnam are facing challenges when it comes to raising new funds as investors are increasingly looking towards more developed markets over emerging ones like Vietnam. This shift in investor focus is primarily due to the uncertain macroeconomic conditions prevailing in the region.

Despite the growing potential of the Vietnamese startup ecosystem, local venture capital firms are finding it difficult to secure funding from limited partners (LPs) who are more inclined towards established and proven markets. As a result, Vietnam-based VCs are struggling to attract the necessary capital needed to launch new investment vehicles.

The lack of meaningful exits is a major barrier for Vietnam’s VCs in raising successor funds. Investors, especially LPs, are hesitant to commit to new funds when there is a perceived lack of successful exits in the market. This is in contrast to more developed markets where successful exits are more common, making them a more attractive option for LPs.

In addition to the challenges posed by limited exits, Vietnam’s VCs also face hurdles related to the overall economic landscape. With macroeconomic headwinds impacting the region, investors are becoming more risk-averse, preferring to allocate funds to markets with more stability and predictability.

The current scenario highlights the need for Vietnam’s VCs to focus on establishing a solid track record of successful investments and exits. By showcasing their ability to generate returns for investors, VCs can build trust and credibility in the market, making it easier to attract LPs for future funds.

In order to overcome the fundraising challenges, Vietnam-based VCs need to adopt a strategic approach that involves building strong relationships with potential investors, highlighting successful investment cases, and demonstrating a deep understanding of the local market dynamics. By actively engaging with LPs and showcasing the growth potential of the Vietnamese startup ecosystem, VCs can position themselves as attractive investment options despite the prevailing macroeconomic uncertainties.

Overall, while the fundraising landscape for Vietnam-based VCs may be challenging, there are opportunities for growth and success by focusing on building a strong track record, fostering investor trust, and demonstrating a deep understanding of the market. With the right strategic approach, Vietnam’s VCs can overcome the obstacles and continue to play a significant role in supporting the growth of the country’s startup ecosystem.