Stopping To Smell The Tulips

It seems now that national politics has once again subsided into the dull affair it should be, America is in need of a new form of mass amusement, or outrage, depending on your outlook. The GameStop trading fiasco this week offered that in spades.

A very brief recap for anybody who somehow tuned it all out: This week, shares in video game retailer GameStop, AMC Theatres and other struggling brands soared as much as 400 percent as hordes of amateur stock traders coordinated on the Reddit forum r/WallStreetBets, TikTok and other online communities to drive the selected stocks higher — in some cases making a lot of money in a very short period of time, while also inflicting substantial financial losses on hedge funds that had taken out massive short positions on those stocks. READ MORE

As SPACs Hunt Targets, They Could Disrupt VC World

After a year unlike any other for SPACs in 2020, a vast majority will spend this year on the hunt for their perfect target company — something that could leave many scrambling in an ultra-competitive environment while also disrupting the venture capital market.

Last year saw 250 special purpose acquisition companies — SPACs — undertake an IPO, over four times more than the previous years, according to data from SPACInsider. However, more than 200 of those SPACs are still seeking target companies to put into their shell, something most have about two years to do before the money goes back to investors. READ MORE

Tech Companies Going Public Aren’t Getting More Employees, They’re Just Getting Bigger Valuations

Recently, public tech companies have gotten bigger in terms of valuation, but not so much in terms of staff size.

That’s the broad conclusion from our latest Crunchbase News analysis of employee totals at venture-backed companies that went public in the past several months. The findings showed a dramatic change from a little over two years ago, when we last looked at the intersection of valuation and staff size, or valuation-per-employee. READ MORE

VC has a diversity problem — can this fellowship change that?

Josué Louis-Alexandre grew up in French Guiana without internet and, aged twelve, hacked a Sony Ericsson 2G phone to build an internet connection using Bluetooth. He later founded an award-winning hardware startup whilst working part time at McDonalds, before becoming interested in VC work.

Louis-Alexandre has a wealth of knowledge about investment and tech; but he’s not your typical venture capitalist from an elite school and an MBA. There are, in fact, few people like him in the whole industry. In the UK, for example, fewer than 1% of decision making VC partners are black.  READ MORE

What You Need To Know About Negotiating A Venture Term Sheet

For any founder, whether a first-timer or a serial entrepreneur, it’s an exciting moment when you receive a term sheet from a venture capital fund for your company’s first preferred stock financing round. Excitement aside, it’s important to digest, understand and negotiate the key provisions of the term sheet. 

It can be overwhelming to understand what’s key when you haven’t negotiated numerous term sheets, but it’s vital to stay focused and diligent as many of these terms can have a lasting impact on your company, even if the term sheet is only a page or two. This is where trusted advisers – like lawyers – come in handy.  READ MORE

Funding To Atlanta Hit A 5-Year High In 2020 As The City Produces Unicorns

While Florida and Texas have been at the center of the conversation around the Silicon Valley exodus and tech’s next big hub, a city in Georgia has quietly been producing unicorns at an unprecedented pace: Atlanta.

The state’s largest city has produced at least three unicorns in the past six months, with Greenlight, SalesLoft and Calendly all reaching or surpassing the $1 billion valuation mark. A look back at 2020 finds yet another unicorn with fintech startup Bakkt reaching the coveted status in March.  READ MORE

Public Market Verdict: The Unicorn Binge Wasn’t Crazy; It Was Really Profitable

It’s hard to imagine, but there was a time not too long ago when billion-dollar startups were exceedingly rare.

Back in 2013, venture investor Aileen Lee, founder of Cowboy Ventures, penned an essay coining the term “unicorn” to describe VC-funded companies valued at $1 billion or more. At the time, she could count just 14 still-private companies less than a decade old that qualified for the title. READ MORE

Private equity could face a reckoning as power shifts in Congress

After years of operating with minimal government intervention, the US private equity industry could face new regulatory scrutiny in 2021 and beyond.

Democrats now control both chambers of Congress and the White House, giving progressive lawmakers who have long criticized the PE industry their best chance yet to enact significant change. READ MORE

VC playing field tilts to established companies, funds

Venture investors moved record sums into biotech and pharma firms last year, according to a quarterly look at venture investing in the U.S.

The gains came despite the Covid-19 pandemic, which squelched investing early last year, especially in early-stage companies, according to the PitchBook NVCA Venture Monitor for the fourth quarter and full year of 2020. The report is produced by PitchBook and the National Venture Capital Association, with support from Silicon Valley Bank and Velocity Global. READ MORE

Tech is bridging the divide between private equity and venture capital

Private equity firms are investing more in VC-backed tech startups, chasing higher returns and early access to the best private companies. The trend is set to continue and probably will accelerate after Covid-19 pandemic recedes.

Ask someone outside the investment industry for the difference between private equity and venture capital firms and you’ll probably be met with a blank stare. Many might answer that both firms basically do the same thing. Some may associate venture capital firms with backing hipster tech startups. READ MORE

Venture capitalists spell out their agenda to Biden administration

Congratulations on your recent election. On behalf of our nation’s venture capital (VC) investors and the entrepreneurs they support, I write to outline several ways we can work together to support your Build Back Better agenda, which in a number of areas will need the active participation of the startup community to be successful. Entrepreneurship is the answer to many of the challenges our country faces, and we stand ready to work on policy that can fully unleash this tremendous economic engine on solutions that support many of our shared priorities. READ MORE

What can go wrong with a SPAC? More than you can imagine, says CFO

The vehicle that an increasing number of companies are using to go public, called a special purpose acquisition company (SPAC), is billed on Wall Street as a streamlined way to list and attract investors. It's a chief reason the number of IPOs surged to 480 last year from 233 in 2019, according to Securities and Exchange Commission (SEC) data. 

But now that Ozan Pamir, CFO of biotechnology company 180 Life Sciences, has been through the process, he has some words of caution to anyone considering taking the same approach.  READ MORE

Microsoft joins $2 billion fundraising round for GM's Cruise self-driving car company

Microsoft has taken a stake in the General Motors-run Cruise self-driving car company during a $2 billion funding round that values the operation at $30 billion.

The parties have also entered a technical partnership that will see Cruise use Microsoft's Azure cloud computing platform for its operations. READ MORE

What Biden, Democrats May Mean For Tech And Investing

Changes in the White House and Congress could portend revisions to taxes, regulations and policies that may affect tech and investing in Silicon Valley and beyond.

With Democrat Joe Biden set to become the 46th president of the United States tomorrow and his party set to control both branches of Congress, issues such as a possible capital gains tax increase, antitrust scrutiny concerning “big tech,” and new areas of focus in the sector all will be watched closely by investors and those in the industry as the political environment tilts Democrat for the first time since 2009-10. READ MORE

Learning from Big Tech’s missteps is putting these startups on a stronger growth path

Over the past several decades, Silicon Valley has produced some of the most innovative and successful companies, investors, products and entrepreneurs. Yet this wild success has not come without its share of well-publicized problems. 

As investors in startups in the Midwestern U.S., we tell our entrepreneurs to learn from the mistakes of others. Doing so will help Midwestern startups and entrepreneurial communities grow faster and more efficiently. Here are three ways that Midwestern startups are building upon lessons learned from Silicon Valley: READ MORE

What You Need to Know About Structuring Your Startup's Fundraising Process

Many startups come to the point where external capital is necessary to finance and grow the business. 

Over the last couple of years, I have accompanied dozens of startups from the beginning of their fundraising journey through the closing of the deal. In studying these startups, I've noticed that the main difference between a founder who is good at fundraising versus a founder who has problems raising funds is the structure of their fundraising process. 

Following are five tips to help structure your fundraising process properly. READ MORE

How one of the world’s fastest-growing startups burned through $300m

On an overcast day in November 2014, Jason Goldberg sat at his desk in NYC, poring over the term sheet to sell his company, Fab.com.

This moment was meant to be the culmination of years of hard work — countless late nights spent strategizing, analyzing financials, and meeting with investors.

Fab had raised $336m since rebranding itself as an ecommerce platform in 2011. At one point, it had been a unicorn, valued at $1B. It had 750 employees on multiple continents, a schmaltzy HQ in New York, and an enormous warehouse stocked with millions of products. READ MORE

AG TECH INVESTING: THE TIME IS NOW

Ag Tech, historically speaking, is the new kid in town. While agriculture has been around since the beginning of time, evolving into what is now a multi-trillion-dollar industry, agriculture and agri-food technology as an investment category is a relatively new phenomenon. Yes, there has always been innovation in agriculture – the cotton gin, the mechanical reaper, the steel plow, and the like. But the world has never seen the likes of what has happened in just the last ten years. And it seems we’re just getting started. READ MORE

Private Equity Firms Seize on IPO Boom With Consumer Assets

Private equity firms are refusing to be left out of the initial public offering boom.

With technology IPOs sometimes doubling on day one, buyout shops are hoping to capture some of the buzz for their less sexy, slower growth and higher leverage assets. Two private equity-backed companies went public on U.S. exchanges this week, with two more filings on Friday for listings. READ MORE

Venture Capital (Still) Has a Gender Problem

Almost half of men are already actively pursuing opportunities as entrepreneurs while they’re still in school pursuing their MBAs — while only 34 percent of women are building businesses out of their proverbial garages as graduate students, according to a study published today by Illuminate Ventures in conjunction with students from Carnegie Mellon’s Tepper School of Business.

Venture capital is famously white and male, even with efforts by the major firms in Silicon Valley to hire more women and fund their start-ups. To find out why, the study’s authors examined MBA students’ views on entrepreneurship, and how female and male MBA candidates differed, if at all, in their concerns about the career path. The report is based on a survey that included 500 responses from 20 MBA programs in the U.S. READ MORE