Why Atlanta could face startup hub growing pains

Atlanta has emerged as a budding startup hub with a list of newly minted unicorns and growing venture capital interest in recent years. The city's allure has even attracted the likes of home rental giant Airbnb, which recently decided to locate its East Coast engineering hub there.

Over the past five years or so, the city has burst onto the venture capital scene in part due to its warmer climate, diverse talent pool and lower taxes, attracting venture capitalists and startup founders alike. While these entrepreneurs have no desire to compete with Silicon Valley and other major startup hubs, they have to grapple with other challenges like retaining talent and sourcing bigger funding checks. READ MORE

SPAC Securities Class Action Comes for Private Equity Sponsor

Pharmaceutical and biotech companies, with proprietary and potentially lucrative products, have been popular targets for SPAC sponsors. Unfortunately, one such private equity sponsor may have its hands full after its managing partner was publicly named in a securities class action.

Immunovant Sciences was a private clinical-stage biopharmaceutical company that develops treatments for autoimmune diseases. One of its promising drugs – IMVT-1401 – was in Phase II clinical trials for the treatment of Graves’ ophthalmopathy and warm autoimmune hemolytic anemia. Dr. Roderick Wong, Managing Partner/Chief Investment Officer of RTW Investments and CEO of blank-check company Health Sciences Acquisitions Corporation (“HSAC”), must have liked what he saw, as Immunovant Sciences entered into a merger agreement with HSAC on September 29, 2019, after which the new company “changed” its name to Immunovant, Inc. READ MORE

Private Equity Bounced Back After Initial COVID-19 Shock; 2021 Set To Be A Dynamic Year For The Industry

Private equity (PE) activity ground to a sudden halt in the second quarter of 2020 as the reality of Covid-19 became apparent. But the industry quickly regained its footing and demonstrated an extreme resilience. Deal and exit value snapped back vigorously in the third quarter, ending the year 8% higher compared to 2019 levels. By all indications, PE weathered 2020's perfect storm without taking a hit to returns, as valuations remained very high. In terms of putting large amounts of money to work, the year's second half ended up being as strong as any two-quarter run in recent memory. READ MORE

A Story of Betrayal, SPACs And Private Equity

Imagine your favorite sports team being forced to hand over its playbook to a bitter rival. That would irk any sports fan.

Now imagine a similar scenario, but it’s Wall Street insiders being forced to hand over their precious trade secrets.

That exact fact pattern is unfolding due to a proposed merger between Dyal Capital and publicly traded Owl Rock Capital — a deal that has spawned multiple feisty lawsuits. READ MORE

2021 Is Shaping Up As A Wild Year For Supergiant Rounds

So far, 2021 is proving to be a wild year for really big venture investments, breaking records for funding totals and round counts. Rather than the pandemic-inspired decline many predicted, we are instead seeing an industry scaling ever-higher peaks.

In particular, so-called supergiant funding rounds of $100 million or more are taking off. Less than two months into the new year, investors already put at least $46 billion globally into such deals, per Crunchbase data. That puts this year on track to come in well above 2020’s already historically lofty levels. READ MORE

With Residential Real Estate Boom Comes Funding For Homebuying Startups

The residential real estate market is booming, and startups in the space are seeing billions in investment as many potential buyers look for new ways to purchase homes.

Despite a pandemic and economic downturn, the majority of real estate startup Doorvest’s customers are buying real estate for the first time, according to CEO Andrew Luong. The startup identifies and buys an investment property on customers’ behalf before renovating it and renting it out for a monthly management fee. READ MORE

Limiting SPAC-Related Litigation Risk: Disclosure And Process Considerations

2020 marked an incredible surge in the prevalence of Special Purpose Acquisition Company (“SPAC”) initial public offerings and business combinations (“deSPAC transactions”). In 2020, there were 248 SPAC IPOs (raising total gross proceeds of over $83 billion) and 66 deSPAC transactions, as compared with 2019’s 59 SPAC IPOs (raising approximately $13.6 billion in gross proceeds) and 28 deSPAC transactions. And the pace continues to skyrocket in 2021 with 160 SPAC IPOs in the first two months of the year and 13 completed deSPAC transactions. This spectacular rise, and the related profits, has unsurprisingly garnered attention from both the United States Securities and Exchange Commission (“SEC”) and plaintiffs’ law firms. READ MORE

A SPAC Strategy to Target the Blank-Check Bonanza

Investors interested in a disruptive growth opportunity can consider a specialized ETF strategy that targets Special Purpose Acquisition Companies, or SPACs.

In the recent webcast, A New ETF Strategy for the SPAC Surge, Jennie Dong, Head of SPACs, NYSE, explained that SPACs raise capital via an IPO with the purpose of using proceeds to acquire an operating business.

SPACs go public through the typical IPO process. The sponsor is typically an institution or seasoned industry executive and generally focuses on an industry or geography. The full cash raised in IPO is placed in a trust account for the acquisition. If no acquisition takes place, the SPAC will liquidate and return funds to IPO investors. READ MORE

A Look Inside VC Firms Joining The SPAC Rush

This month’s batch of SPAC filings included its fair share of venture capital firms, with at least three firms filing S-1 documents with the U.S. Securities and Exchange Commission in February.

Lerer Hippeau, Khosla Ventures and Advancit Capital all formed SPACs, according to SEC filings, with Khosla Ventures forming four blank-check companies. Forming a SPAC is another way for VC firms to allocate capital and serve their limited partners, Geoffrey Weinberg, senior managing director at D.F. King and Co., said in an interview. READ MORE

VC firm Sequoia Capital suffers data breach, investor information stolen

Sequoia Capital, one of the most famous venture capital firms in Silicon Valley has suffered a data breach with investor information likely stolen.

Officially referred to by the firm as a “cybersecurity incident,” it’s believed that the attack vector was via an employee being phished. Whether malware or ransomware was involved in the data breach is not clear with Sequoia informing its investors of the breach on Friday, Feb. 19. READ MORE

Founders, stop chasing after the limelight — just build your damn product

I get contacted by ‘limelight-seeking’ founders at least once per month. They’re easy to spot: they usually have tons of articles in the media; an active Medium blog with articles like ‘How to read 100+ books a year and be a successful CEO’; participate in panel discussions; regularly win pitch competitions and fill up several pages of Google search.

But when I see their startup’s financial results and user metrics, I want to become one of the first testers of Elon Musk’s spaceship and leave this planet screaming in despair. READ MORE

VC shares 5 tips for startup founders who are ready to raise their Series A round

Your startup just hit $1 million in annual recurring revenue. You’ve got product market fit. Now you’re ready for more capital to supercharge that growth — it’s time to raise a Series A round.

But how should you pitch investors? What are they looking for? What do they care about? What will it take to land the funding needed to become a billion-dollar company? READ MORE