SPACs will rebound in wake of tougher oversight

SEC Chair Gary Gensler said last month the agency will seek to strengthen investor protections by investigating how SPACs raise cash from the public and merge with target companies.

The SEC’s corporate finance, examinations and enforcement divisions will “be closely looking at each stage to ensure investors are being protected,” Gensler said in testimony to a House subcommittee, adding “each new issuer that enters the public markets presents a potential risk for fraud or other violations.” READ MORE

Cryptocurrency Experts Say These 4 Factors Are Driving Change In The Industry

The COVID-19 pandemic accelerated acceptance of digital currencies like Bitcoin and the underlying blockchain technologies that power them. And while Bitcoin volatility continues — with the currency hitting its lowest point in months this week — investors are optimistic momentum will continue even as the world slowly starts to return to normal.

The crypto and blockchain sector has attracted nearly $12.4 billion in venture investment into U.S.-based companies since 2017 and $19.4 billion globally, Crunchbase numbers show. In fact, data so far for 2021 shows dollars were nearly 3x from 2020 for both global and U.S. investments. But the sector also faces continued opportunities and challenges going forward, including more widespread adoption and new regulatory pressures from governments around the world. READ MORE

A Decade After ‘Software Is Eating The World,’ Andreessen Horowitz Has Its Best Exit Year Yet

A decade after one of its co-founders wrote the five words that would go on to define the future of Silicon Valley — “software is eating the world” — the venture firm Andreessen Horowitz is having its best exit year yet.

A16z — as the firm is also known, for the 16 letters between the A in founding partner Marc Andreessen’s name and the Z in Ben Horowitz’s — is closing out the first half of 2021 with its biggest exit yet, Coinbase’s direct listing, under its belt. READ MORE

Banking exodus drives PE hiring spree: ‘I’ll earn more in private equity’

A burnout crisis in investment banking is giving an unexpected boost to private equity ﹘ a flood of junior dealmakers vying to jump to the buyside.

That has led to a recruitment spree. Private equity firms in the City have seen a surge in interest, with applications up by 20% for associate level positions in the first three months of the year, said Gail McManus, founder of Private Equity Recruitment. These roles already attracted more than 300 candidates for each available position, she said. READ MORE

The Key To Private Equity’s Growth Is The Booming Secondary Market

The secondary market for private equity, where stakes in funds and in their assets change hands or are sold into new structures in order to raise liquidity for investors, has finally come into its own. The market’s almost certain upward trajectory over the next few years should vastly increase the appeal of private equity - encompassing buyout, credit, growth, real asset and venture capital strategies - for investors of all stripes, institutional and retail. READ MORE

Seed is not the new Series A

The incredible success of the cloud business applications space in recent years has driven up valuations and fundraising across all stages of venture investment. That has in turn increased VC fund sizes, led to massive cloud IPOs and brought a new cadre of investors to further fuel the fire.

The median Series A raised by cloud companies these days is about $8 million and can often go well above $10 million, according to PitchBook data from the first quarter of 2021. Series Cs now routinely include secondary capital for founders, and many Series Ds are above $100 million with valuations in the billions. READ MORE

Venture Capital Funds: Four Requirements For A Strong PR Campaign

Back in the '00 days, there were dozens of venture capital (VC) funds. Today there are several hundred, each vying to find the next unicorn to bet on. Despite the “softening” of deals that Sequoia predicted in 2020 due to Covid-19, more than 10,000 deals were done, nearly on par with 2017’s deal total. The hunt for unicorns certainly continues. 

In order to stand out from other funds, some VCs have turned to PR campaigns to elevate their allure to those they sign checks for (founders) and to those they take checks from (limited partners).  READ MORE

Venture Capital Makes a Record $17 Billion Bet on Crypto World

For a sense of just how big everything crypto has become, you can, of course, just take a look at coin and token prices. And then you can check again five minutes later to see if the space’s notorious volatility has markedly changed the first observation.

But for a more stable measure of the industry’s growth, consider this: venture capital funds have already poured $17 billion this year into companies that operate in the space, according to data provider PitchBook. That’s by far the most in any single year and nearly equal to the total amount raised in all previous years combined. READ MORE

SPAC Mergers are Passing, but Watch Out for Redemptions

Shareholder approval of SPAC mergers are almost a check-the-box formality these days, provided SPAC sponsors can get enough of a quorum to actually pay attention and vote their shares. However, important to note that shareholders can both a) vote in favor of a merger AND b) redeem their shares at the same time. Historically it was a common trade: buy SPACs at IPO, redeem shares at merger and hang onto warrants for the option value and upside. READ MORE

How AI Is Transforming Venture Capital

Venture capitalists know that their advantage lies in identifying the most promising opportunities before their competitors do. This is confirmed by a University of Chicago study by Morten Sorensen, which shows that investors create 60% of their value from the upper part of the funnel, specifically from sourcing and screening.

In which case, sourcing and screening must be a constant target for improvement, right? No — apart from a few VCs who have reinforced their sourcing with web crawlers, sourcing and screening practices have remained the same since the inception of the VC asset class around 1940. However, AI is uniquely suited to solve these challenges and create greater value for investors.  READ MORE

This Is How 2020’s Biggest Tech IPOs Have Fared On The Stock Market Roller Coaster

Last year was a big year for initial public offerings, despite the COVID-19 pandemic and the temporary pause it put on public market debuts. But many of those newly public companies have seen their stock prices dip from their levels at the beginning of the year.

Last year ended with notable startups going public in mega-deals, including Snowflake as the largest software IPO ever, with Snowflake, Airbnb, DoorDash, Unity and Palantir among the largest venture-backed IPOs of the year. READ MORE

Wall Street grapples with new SPAC equity contracts after regulator crackdown

Wall Street accountants and lawyers are trying to figure out new equity agreements to lure investors back to the blank-check company market after the U.S. regulator cracked down on the use of warrants, six industry executives told Reuters.

They are discussing jettisoning warrants issued by special-purpose acquisition companies, or SPACs, in favor of rights agreements, or dramatically restructuring the warrants after the Securities and Exchange Commission (SEC) said many SPAC equity warrants should be considered liabilities. READ MORE

Spac’s private equity dilemma: better in or outside the fund?

Many private-equity firms have embraced the recent boom of special-purpose acquisition companies, but whether they rely on their own money or the funds they manage is a decision that some investors hotly debate.

“Who’s sponsoring the SPAC—the firm or the fund—is probably the most important question,” said Brendon Parry, a managing director who oversees private investments at TIFF Investment Management, an asset manager for nonprofit organizations. READ MORE