2020, 2021 and the EC/VC Industry – Review of the Past Year and Predictions for the Current One

In the beginning of February 2020, COVID-19 seemed to have little to no impact on venture capital investing in the United States. Fast forward a few weeks later: concerns quickly spread over the entire industry about the effects of the COVID-19 pandemic on venture investing, its impact on startup companies and the U.S. economy in general. Emerging growth companies instantly went into “conserve cash mode” and applied for PPP loans. READ MORE

Pets Became Purrfect Pals During Pandemic While Startup Funding Didn’t Lay Down

Venture capital interest in U.S. pet-focused companies, from nutrition to travel to health care, grew 29.5 percent from 2019 and 2020 as pets received more attention from owners being home for the past year.

“Last year, we saw a macro trend of humanization of pets, where people were treating pets as members of the family, and therefore, spending more money on food, grooming, treats and walking,” Nick Stocks, general partner of White Star Capital, told Crunchbase News. READ MORE

How To Attract Angel Investors In 2021

In addition to being the CEO of ThirdLove, I am also an active angel investor--predominantly in consumer-focused women-led startups. As an angel investor, I am always receiving inbound pitches from founders looking to raise their pre-seed, seed, and Series A rounds.

Despite what the pandemic has done to businesses, the economy, and society as a whole, there has been no slowdown in deal flow for early-stage investors. If anything, the general consensus in the entrepreneurship community is that now is a terrific time to start a company--because there are an abundance of problems still to be solved in the world. READ MORE

When It Comes to Space Company IPOs, You Must SPAC It

2020 was the year of the special purpose acquisition company (SPAC) IPO -- and 2021 is probably going to be even better.

According to SPACInsider.com, no fewer than 248 SPACs filed for IPO last year, going public with the sole intent of finding a hot private company to buy and bring public in a reverse merger. Not even one full quarter into 2021, we've already seen nearly as many SPAC IPOs this year as last year.  

Why are SPAC IPOs so popular? READ MORE

Silicon Valley still has a bright future. But Austin's time is now

More than a year ago now, I left the Bay Area for Austin, Texas. It wasn't an easy decision. I've spent three-plus decades embedded in Silicon Valley, investing in some of the region's top tech companies. With its entrepreneurial culture, top-tier academic institutions and countless tech success stories, there wasn't a better place in the world than the Bay Area to be an investor. READ MORE

How the SPAC Bubble Could Burst

Before the SPAC boom, there were a number of proptech companies in the IPO pipeline. As more SPACs, which are also known as special purpose acquisition companies or blank check companies, have hit the market, this pipeline is emptying.

“That could have taken quite some time to clear itself out because there is just a huge backlog of companies that were doing an IPO, irrespective of whether they were proptech or not,” says Zak Schwarzman, a partner at MetaProp. READ MORE

SPAC fundraising is up an insane 2,000% from a year ago

The SPAC market is so hot that this year's fundraising haul has already surpassed all of 2020's. And it's not even April. Understandably, the world's largest asset manager worries the SPAC boom is overdone.

"If you look at the SPAC market, there's some really attractive new companies and new technologies coming to the market that are financing effectively," BlackRock executive Rick Rieder told CNN Business. "And then there are some that make no sense." READ MORE

Why It’s OK To Find Competitors With Your Startup Idea

Most startups fail. Some fail because they get outcompeted. Should competition be your main worry when you come up with a brand new startup idea?

According to CB Insights, competition is the fourth most common reason for the failure of a startup. Competition was the main cause of failure for 19 out of 101 analyzed startups in their dataset. The most common reason, however, was lack of market need – the cause of failure fор 42% of the companies. READ MORE

The global inequity in venture financing is staggering

The global venture capital ecosystem is inequitable. In the United States’ mature venture capital market, an entrepreneur’s race, gender and age help determine who has access to capital.

But there are other limiting factors: geography, for example. While it has been encouraging in recent years to cover what has felt like a boom in Latin American and European fintechs, or a general rise in VC activity in a host of Asian countries, the landscape remains imbalanced. READ MORE

11 words and phrases to cut from your VC pitch deck

You have just 170 seconds. Weeks or even months of working on your pitch deck could come down to the 170 seconds (on average) that investors spend looking at it.

“Investors see a lot of pitches,” VC and LinkedIn co-founder Reid Hoffman noted. “In a single year, the classic general partner in a venture firm is exposed to around 5,000 pitches … and ends up doing between zero and two deals.” READ MORE

Cities With the Most Startup Businesses

Startups are a significant driver of the U.S. economy. Each year, thousands of entrepreneurs launch new businesses that create jobs and spur innovation and efficiency across the market. According to the U.S. Census Bureau, more than 420,000 startups accounted for 2.2 million new jobs in 2018.

Unfortunately, entrepreneurship in the U.S. has been declining for decades. In the late 1970s, the startup formation rate in the U.S.—defined as the number of new firms in a given year divided by the total number of firms—was nearly 14 percent. Four decades later, the rate was just above 8 percent READ MORE

Why the megafund party in venture will roll on

The dominance of megafunds is unlikely to abate any time soon in venture capital, concentrating more buying power in the hands of a few. Global investors increasingly want exposure to private technology companies, and many have growing pools of capital dedicated to buying stakes in them.

Endowments, sovereign wealth funds, family offices and pension funds often dedicate a target percentage of their assets to venture capital. Since their total assets have been growing because of a booming stock market, the dollar amount they can devote to venture capital has risen as well. READ MORE

When You Want Liquidity But Don’t Want To Wait For An IPO

For many startup employees, it often seems like the only options for liquidating their shares and receiving a payout for their equity in a company is to wait for it to go public or be acquired.

An IPO or an acquisition are the traditional exit options for venture-backed companies. But in recent years more options have emerged for startup employees and other shareholders to liquidate their shares in the private market, including Nasdaq Private Market and CartaX. READ MORE

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