National Venture Capital Association supports Endless Frontier Act

The National Venture Capital Association (NVCA) expressed strong support for a bill introduced in the Senate this week to increase investment in emerging technologies.

The Endless Frontier Act, sponsored by Sens. Chuck Schumer (D-NY) and Todd Young (R-IN), would provide increased investment in early research, education, training, facilities, and entrepreneurship to support U.S. leadership in key emerging technologies. Leveraging public-private partnerships, the legislation makes commercializing these technologies through new company formation a priority for many of the programs. It is seen as a critical activity for developing emerging startup ecosystems and spreading opportunities across the country. READ MORE

What Biden’s Reported Capital Gains Tax Hike Could Mean For Startup Employees

President Biden’s expected proposal to double the U.S. capital gains tax rate, part of his $4 trillion economic plan for reshaping the American economy, is significant for the U.S. startup and venture capital sectors, but the proposed hike likely wouldn’t affect the average employee at a venture-backed startup.

Biden will propose increasing the capital gains tax rate for high-income earners from 20 percent to 39.6 percent, Bloomberg reported on Thursday. The proposal would affect people who earn $1 million or more and the federal tax rate for high-income investors could reach 43.4 percent (that’s the current surtax on investment income, plus the new capital gains tax rate), per Bloomberg. READ MORE

The SPAC boom has 'screeched to a halt.' That may be good thing

One of the hottest corners of financial markets is getting slightly less manic.

What's happening: Billionaires, celebrities and athletes have raced to create special-purpose acquisition companies, or SPACs, over the past six months. These "blank check" firms, which raise money from investors and then go hunting for takeover targets, have been flagged as a sign of overexcitement on Wall Street. READ MORE

SPAC Deals Are Far Below Peaks, But Still Generously Valued

We have formulas galore for valuing fast-growing, money-losing companies in hot sectors. But at the end of the day, there’s one metric that matters: How much are investors willing to pay?

When it comes to companies taking the SPAC route to public markets, it seems investors are willing to pay much less than a few weeks or months ago. Shares of many venture-backed companies that carried out the most highly valued mergers with blank-check acquirers are trading for a fraction of their former highs. READ MORE

Venture capital’s quest for diversity and equity remains a work in progress

Nearly a year ago, as the nation reckoned with the horrifying video of George Floyd’s murder in Minneapolis, Alejandro Guerrero, a general partner at early stage venture capital firm Act One Ventures, sat alone at his home in Los Angeles, coming to terms with what he had just seen and bracing for the fallout.

“All the signs were that LA would go up in flames,” Guerrero recalls of a city already on edge from the stress of the coronavirus pandemic, pushed further to the brink amid racial tensions. “I was at home, in the dark in my living room, watching the footage and just crying and processing.” READ MORE

A year of turmoil for the private markets, but PE continues to outpace public markets

Overall funds raised fell slightly year-on-year due primarily to an apparent short-term discontinuity in the early months of the pandemic, but, the pre-pandemic pace of fundraising returned by Q4. AUM growth and investment performance in most asset classes eased off in the spring as the industry adjusted to new working norms, then came back strong in the latter half of the year. Private equity purchase multiples kept climbing and dry powder reached another new high, standing at USD1.4 trillion (60 percent of the private markets total), having grown 16.6 per cent annually since 2015. READ MORE

Private equity's other tax fight

Private equity is carefully watching the D.C. debate on corporate taxes, in which Senate Democrats seem to be settling on a 25% rate.

Zoom in: Marginal rates obviously matter, but for PE it's just an appetizer before the weedier work begins on issues like corporate interest deductibility.

Why it matters: Corporate interest deductibility is a straw that stirs the PE drink, better enabling buyout firms to finance acquisitions by adding debt to portfolio company balance sheets. READ MORE

How BB King Song Nailed The First Stage Of Venture Capital

Robert Johnson was on CNBC (December 17, 2020 around 6:30 a.m. CST), and like many others, wanted someone to offer more venture capital for minority venture development. With all due respect, he needs to be clearer on exactly what he means, who should be funding this, and what risks are they taking? Also how can the risks be reduced?

Here's why. VCs like to fund after Aha when there is proof of potential. READ MORE

Unusual Ventures Partner Sandhya Hegde On Entrepreneurship And Breaking Into Venture Capital

Sandhya Hegde is a partner at Unusual Ventures, leading investments in enterprise SaaS platforms. Prior to Unusual, she was an early employee at Amplitude, joining as a product manager at the single-digit ARR stage. She climbed the company ranks leading pivotal efforts across product development, fundraising, category creation, and go-to-market strategy. She went on to become the executive vice president of marketing and growth, helping establish Amplitude as a unicorn and category leader in product intelligence overseeing 20x growth in its ARR. READ MORE

How hedge funds are leading the race to stake startups

As is customary among VCs, Vertex US tries to build relationships with founders in hopes that the startups will agree to let the early-stage firm lead their next round of financing. After recently meeting with one such founder about 30 times and helping the company put together diligence materials, Vertex was sure that they were the frontrunner to lead its Series A.

But at the last minute, a crossover fund stepped in with a proposal at a valuation that was about $40 million more than Vertex was offering. READ MORE

The Most Highly Valued Venture-backed Private Company In The US

Payments processing startup Stripe earlier this year became the most highly valued venture-backed private company in the U.S. and the third most valuable in the world when it was valued at $95 billion in its Series H funding round. 

Its No. 3 placement on the Crunchbase Unicorn board is just behind Chinese financial services giant Ant Group, valued at $150 billion, and ByteDance, the world’s most highly valued unicorn with a reported valuation of $180 billion in a financing round in late 2020 led by Sequoia Capital and KKR.  READ MORE

Women’s Digital Health Startups Reap Record VC Funding on Covid Surge

Once considered too niche or risky by the venture capital community, women’s health startups have seen a surge in investments as the Covid-19 pandemic pushed more services online.

Funding for women-focused digital-health startups rose 105% last year to $418 million and was spread across 22 companies, nearly twice the number from a year earlier, according to Rock Health, a San Francisco-based seed and early-stage venture fund. The firm tracks deals of $2 million or more among U.S.-based digital-health companies. It counts 55 companies in the "femtech" category, which includes those that tackle issues such as reproductive health, maternal care and chronic disease. READ MORE