Your Custom Text Here
Ten venture firms last August announced plans to add “diversity riders” to their startup term sheets. Now, the effort is being supported by more than 50 firms and investors.
Why it matters: Diversity riders, which are intended to include investors from underrepresented backgrounds in VC rounds, are a concrete effort to expand who gets to invest in, and profit from, startup growth. READ MORE
A venture capitalist once told me candidly that whenever you see the phrase “democratization” in tech marketing material, think of it as a red flag. Democracy, generally speaking, often comes with an ironic caveat: It disproportionately benefits white and male participants. Now, you know me well enough to know that I wouldn’t start off your Saturday with this dreary of an introduction normally, but I think that that reality is why a new tool, championed by tech entrepreneurs Lolita and Josh Taub, could be on to something actually innovative. READ MORE
Every so often at Crunchbase News, we take it upon ourselves to read through every sizable recent seed funding round. It’s an exercise that leads to both information overload and a vague sense of where the startup future is headed.
The latest data-dive focused on seed and pre-seed rounds of $2 million or more announced in 2021 — of which there are a little over a thousand reported. The analysis found a few investment themes that stand out as especially popular. READ MORE
I'M A BIG FAN of children's literature. In terms of sage advice for entrepreneurs, it's hard to top Aesop's fable about the dog and his bone. And Dr. Seuss's Yertle the Turtle can't be beat for conveying an invaluable lesson about how to treat the other turtles in your pond.
But then there's The Giving Tree. Some people view it as a beautiful tale of a tree's selfless love. Who are they kidding? Shel Silverstein's story about a tree that gives up everything it has to a self-centered boy is one of the most depressing children's books ever. Unfortunately, it also happens to be a pretty accurate representation of many relationships between venture capitalists--the boy--and founders who give away more and more equity until there's nothing left. READ MORE
Nearly $161.5 billion of venture capital poured into U.S.-based companies last year, as the private markets and tech startup ecosystem had another banner year.
While the country as a whole saw new highs reached in venture, so did states such as Washington, North Carolina and Minnesota — not just in the amount of capital raised by private companies in those states, but also in terms of the percentage of total venture capital dollars in the country, Crunchbase data shows. READ MORE
Special purpose acquisition companies (SPACs), or “blank check” companies, have been one of the most popular investments and investment vehicles over the past year – an alarming 308 SPACs have gone public since the start of 2021. In particular, SPACs have played a major role in supporting the marijuana funding boom since the cannabis industry faced a drought in late 2019. In just the first three months of this year, three SPAC initial public offerings have totaled over $570 million.
However, signals glaring from the U.S. Securities Exchange Commission (SEC) have attempted to slow down the momentum of the SPAC market. A few of these public statements so far this year include: READ MORE
When WeWork last published an investment prospectus in 2019, potential IPO investors were horrified by the corporate excess and cash burn. Now as part of its second attempt to go public via a merger with blank-check company BowX Acquisition Corp., WeWork has published another one laying out everything that’s happened since then. Though lacking in the original’s grandiose claims about “elevating the world’s consciousness,” the new document doesn’t otherwise disappoint. READ MORE
Private equity is making a comeback from its pandemic lows — and firms have big plans to capitalize on the booming exit environment.
In the second quarter of 2020, private equity exit activity dropped to decade lows, according to the 2021 global private equity divestment study from Ernst & Young. Then, it sprung back, as private equity leaders saw opportunities to produce stronger valuations. From March 2020 to March 2021, PE exits jumped nearly 40 percent to $600 billion, higher than it had been since before 2010. READ MORE
A form of warrant that isn’t accounted for as a liability for special purpose acquisition companies (SPACs) is under development, but until that process is completed and gets an okay by the Securities and Exchange Commission, sponsors and others with an interest in the market face uncertain terrain, Gerry Spedale said in a Gibson, Dunn Crutcher webcast last week.
“You have accounting firms and law firms working together on that form, and that needs to get blessed by the SEC before everyone’s going to be comfortable moving forward with that approach,” said Spedale, a Gibson, Dunn & Crutcher partner. READ MORE
We’re almost halfway through the year, and the current market for IPOs is far from where it was when 2021 began.
Reports of inflation spurred a far-reaching stock selloff last week, with tech stocks in particular being hit hard. That, in turn, has led to an expected slowdown for IPOs in the near future. READ MORE
Whether you’re building a company or thinking about investing, it’s important to understand your strategic advantage. In order to determine one, you should ask fundamental questions like: What’s the long-term, sustainable reason that the company will stay in business?
The most important elements for founders to consider when figuring out their strategic advantage(s) include one-sided or “direct” network effects (e.g., with social media sites like Facebook), marketplace network effects (e.g., with two-sided marketplaces like Uber), data moats, first mover and switching costs. READ MORE
Private equity and venture capital professionals in the US are a step closer to being taxed at a much higher rate on their income.
Democratic senators earlier this week introduced a new bill that aims to close the carried interest loophole, setting the stage for top earners to see their tax rates on investment gains roughly double. READ MORE
Google “how to raise funding for my startup” and you will find hundreds of articles telling you how to craft your pitch, how important storytelling is, and how you should order the slides in your pitch deck.
Let me tell you something shocking. READ MORE
An unprecedented number of companies have joined Crunchbase’s private company unicorn board already this year: Less than halfway into 2021 there are 166 new companies, compared to 163 for the whole of 2020.
Based on our analysis, New York-based hedge fund Tiger Global Management is the most active investor in the 2021 crop of new unicorns as well as in private unicorn startups overall — and that’s not only with the most portfolio companies, which one could expect, but also by the number of investments. READ MORE
A pair of little-noticed court cases are stoking anxiety at US buyout firms, with experts saying they could pave the way for hefty payouts in legal scrapes over some of the industry’s most controversial practices.
That’s because the lawsuits are spilling out of the New York bankruptcy court and Delaware Chancery Court — private equity’s long-preferred legal enclaves for settling its disagreements quietly. READ MORE
One morning last October, as wildfires raged across Northern California, President Donald Trump convalesced from Covid‑19, and Congress debated how big of a stimulus bill would be needed to rescue the economy, Chamath Palihapitiya went on TV to pitch investors on the latest stock he was taking public. READ MORE
As an entrepreneur, you started your business to create value, both in what you deliver to your customers and what you build for yourself. You have a lot going on, but if building personal wealth matters to you, the assets you’re creating deserve your attention.
You can implement numerous advanced planning strategies to minimize capital gains tax, reduce future estate tax and increase asset protection from creditors and lawsuits. Capital gains tax can reduce your gains by up to 35%, and estate taxes can cost up to 50% on assets you leave to your heirs. Careful planning can minimize your exposure and actually save you millions. READ MORE
Search engine optimization, PR, paid marketing, emails, social — marketing and communications is crowded with techniques, channels, solutions and acronyms. It’s little wonder that many startups strapped for time and money find defining and executing a sustainable marketing campaign a daunting prospect.
The sheer number of options makes it difficult to determine an effective approach, and my view is that this complexity often obscures the obvious answer: A startup’s best marketing asset is its story. The knowledge and expertise of its team, together with the why and the how of its offering provides the most compelling content. READ MORE
A new reality TV show called "Unicorn Hunters" borrows the pitch-for-fame-and-fortune concept popularized by "Shark Tank" but adds an unusual twist: It's not just the judges throwing money at the businesses. Viewers at home can invest, too.
The new streaming series -- which debuted Monday on its website, YouTube, LinkedIn and Facebook Video -- features late-stage businesses seeking investments ahead of going public. READ MORE
Women entrepreneurs have long gotten a small slice of the venture-capital funding pie.
Female VC leaders are trying to change that.
In fact, opportunities abound for “wontrepreneurs,” said Julie Sandler, managing director at startup studio and venture capital fund Pioneer Square Labs, based in Seattle. She spends most of her time running the VC arm, PSL Ventures. READ MORE