Democrats in Congress again propose end to carried interest tax break

It's been more than 10 years since then-President Barack Obama first proposed ending the carried interest tax break, a provision that allows top earners from private equity and hedge funds to pay a smaller percentage in federal income tax than other Americans.

With Democrats now in control of both chambers of Congress and the presidency, legislation to close the loophole and increase the tax burden for investment managers is back on the agenda. READ MORE

The Science Of Building A Venture Capital Fund

Over the past decade, venture capital has undergone a remarkable transformation. What started as a boutique industry dominated by former founders has blossomed into an institutional asset class brimming with aspiring professionals. Consequently, venture investing is no longer just a craft, but a career. For those just starting out, generating good returns can feel like an art, but building a platform that extends beyond a single fund is more of a science. In search of the formula for building a long-lasting, industry-leading venture capital fund, I sat down with Winter Mead, a former institutional LP and co-founder of venture fund accelerator Oper8r. READ MORE

Will SPACs Outpace Traditional IPOs This Year?

Last year, I called 2020 “the year of the SPAC.” Well, SPACs, or special purpose acquisition companies, are still on a tear in 2021, and now the question is whether initial public offerings of these blank-check companies will outpace traditional IPOs this year.

Patrick Healey, founder and president of Caliber Financial Partners, thinks so, at least when it comes to the number of SPACs going public. READ MORE

The Life Of An Entrepreneur Without Venture Capital

Although a nascent industry, particularly in Europe, venture capital has become an integral part of innovation and the technology sector. Since 2012 there has been a continuous increase in fundraising by European venture capital funds, and VC has been instrumental to the growth of some of the most successful and advanced European companies, ranging from Klarna to Kahoot, DeepMind to Spotify. READ MORE

Why Family Offices Are Drawn Toward Venture Capital

Throughout the last decade, wealthy families have gravitated away from hedge funds to private investments, including private equity and venture capital.

A big reason is that entrepreneurs who are comfortable with risk, and evaluating management teams and the potential success or failure of a business idea, are usually the reason a family became wealthy. And these families are drawn to the potential private investments offer for high returns.  READ MORE

January 2021 VC Funding Hits All-Time High And Produces A Record Number Of New Unicorns

Venture funding in January 2021 hit at an all-time monthly high of $39.9 billion, an analysis of Crunchbase data shows. 

January’s funding total topped the previous monthly high of the last two years; July 2020 at $38.5 billion. A larger proportion of dollars in these funding spikes was also invested in late-stage venture capital — around 69 percent — with the lion’s share of capital going to Series C+ and private-equity rounds in venture-backed companies.  READ MORE

Venture Capital vs. Equity Crowdfunding: Which Is Better for Your Business?

any startups have been conditioned to think venture capital is the best source of funding. While venture capital has its benefits, it may not be the right method of fundraising for your business.

In a recent webinar, Josh Amster, StartEngine’s VP of sales, dove into the differences between venture capital and equity crowdfunding (ECF), comparing each method’s strengths and weaknesses to help clarify which funding pathway is right for you. READ MORE

3 Ways To Get The VC Valuation You Deserve

The question of valuation is intimidating for many early-stage startup founders. As a young company with a short history and little to no revenue, there simply isn’t a formula capable of producing a neat round number that objectively represents the value of your business. Valuation, then, becomes the art of making a deal, not the science of building a spreadsheet.

Many factors play into a valuation negotiation with a VC—your business fundamentals, while important, are among the many. The market landscape, the VC’s incentives, and the strength of your network can all factor into the discussion as much, if not more so, than business economics. READ MORE

Here’s how to get a venture capital investor’s attention

Let’s talk about how startup founders get funded—and why they don’t. I get about a dozen questions each week via my website from first-time entrepreneurs asking for help getting their company funded. I don’t do that. But I do know a ton of venture capitalist (VC) and angel investors, so I asked a bunch of them what works, what hurts, and what they look for from the very first contact with an entrepreneur. READ MORE

The NFL’s Venture Capital Fund Is Quietly Generating Super Investment Returns

The Super Bowl is the pinnacle of NFL promotion—a sprawling event that commands so much attention even the commercials are must-sees. But not everything the league does is meant to grab headlines and eyeballs.

Take, for instance, 32 Equity.

Few people have heard the name, much less know that it’s the NFL’s venture capital arm. Despite its low profile, the fund has scored some significant investment gains in its few years of operation, focusing on supporting and growing efforts that promote football and the league while providing owners a strong return on investment. READ MORE

Silicon Valley’s iron grip on venture capital is slipping

Tech watchers have been itching to write Silicon Valley’s epitaph for years (indeed, many already have). While America’s preeminent tech hub is not dead yet, the data shows it is beginning to give up ground to smaller startup hubs across the country.

The Bay Area has for decades claimed the lion’s share of venture capital deals in the US. That hasn’t changed. But lately, its share of deals has been gradually declining. This year, predict analysts at the private equity research firm PitchBook, it will drop below 20% for the first time in their dataset, which stretches back to 2006. READ MORE

Venture capital is going to get even bigger, faster and more expensive this year

The venture capital market has skewed later and larger in recent quarters, something you might have felt in the rapid recent pace of new unicorn formation. December was a hot month for new unicorns, for example. So was January. February likely will be more of the same.

Powering those unicorn births are huge rounds led by large funds. In 2020, for example, there were at least 97 global fintech rounds worth $100 million or more. That number was up from 92 in 2019 and 66 in 2018. Each preceding year was a prior record. READ MORE

The Pressure Is on Private Equity To Take ESG Seriously

Pensions and other institutions that want to hire private equity firms that consider the environmental impact or the diversity of a company’s employees in its investment decisions may have to wait a while. Only 24 percent of private equity firms took environmental, social, and governance matters seriously and at the same time had a mature process in place to evaluate these factors before acquiring a company, according to a survey by Ernst & Young. READ MORE

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