Private equity fundraising surged to $459bn in first half of year

Private equity fundraising is surging with the industry on pace to challenge its best year ever for gathering capital.

Private equity funds world-wide, including venture capital vehicles, closed on $459bn this year through June, the highest sum for the period in at least the past five years, according to data from Preqin. The tally is about 51% above the $303bn raised in the same period of last year, when the Covid-19 pandemic briefly interrupted what had been a booming market for private equity and venture funds. READ MORE

At $377,000 a year are venture capitalists overpaid? Yes and no – here’s why

There was an interesting article last week in Pitchbook reporting that Venture Capitalists continued to take healthy bonuses even during the 2020 pandemic.  According to Pitchbook, even VC associates received bonuses on average of $40K-$60K.  This got me thinking about the industry pay scale for VC partners which salary.com reports an industry median of $377,775 in 2020.

So….are VC’s overpaid? READ MORE

Startups have never had it so good

The venture capital market is racing ahead, foot on the gas, middle finger out the window, hair on fire. That’s our read of the Q2 2021 data released thus far concerning how much money venture capitalists deployed around the world during the second three months of the year.

Startups have never had it this good when it comes to accessing private-market funds. READ MORE

Don’t send VC a cold deck ever again: Start sending video pitches

Let’s play out this scenario. Your deck is ready and you’re just about to start reaching out. What does conventional wisdom say that you should send? A three-paragraph overview, four bullet points outlining the problem, and three bullet points on how you solve it and why you’re the best. You went through all that work … but who is going to read it? A junior person. Not even a senior VC.

Even if you do end up with a meeting, odds are that your deck didn’t even get read. The biggest lie in venture capital is: “Yes, I read through your deck.” Because those words are immediately followed by, “ … but why don’t you run us through it from the beginning?” READ MORE

Rep. Hollingsworth introduces bill to spur venture capital investments in startups

U.S. Rep. Trey Hollingsworth (R-IN) introduced Tuesday a bill to encourage more investment from venture capital firms in startups and small businesses.

The Developing and Encouraging our Aspiring Leaders (DEAL) Act (H.R. 4227) requires the Securities and Exchange Commission (SEC) to expand the definition of a qualifying investment to include broader equity securities and venture capital investments in other funds. It would allow venture capital funds to provide necessary growth capital as those companies go public without registering as a registered investment adviser. READ MORE

How Business Model Diversification Can Enable Venture Capital Firms To Scale And Succeed

When I was considering opening a venture capital firm, one of my friends in the industry told me something very important. He said that he started a venture capital firm because he was already financially prosperous and had never heard of anyone who became very successful because they started a venture capital firm. This idea is supported by a statement from a well-known startup investor in a 2017 TechCrunch analysis on venture capital firms: He estimated that 95% are not profitable. Therefore, as I started my journey and designed my firm’s business model, I focused on how I could build a sustainable — and most importantly, profitable — business. READ MORE

3 Mistakes To Avoid Now For A Smooth Exit Later

As entrepreneurs, we are anxious to see our vision come to life. We desperately want to succeed commercially and grow. Combine that with an almost unhealthy level of optimism, and you get a perfect storm for a disaster.

We often lose sight of the end game. For the lucky ones that means exiting the company and liquidating our equity: In 98 percent of the cases that would be mergers and acquisition, with 2 percent reserved for initial public offerings. READ MORE

Private equity funds discover new solution to the overwork issue.

Don’t bother calling your contact at Carlyle Group in the week beginning 16 August – they won’t be there. The company is taking a leaf out of the books of Victorian cotton mill owners and shutting down the whole firm for a week to let everyone have some time off. According to human resources head Bruce Larson, it’s part of a firmwide emphasis on wellbeing and health which has also seen “Wellness Wednesdays”, Peloton clubs and a $750 “wellbeing stipend” which employees are meant to spend on gym memberships or mindfulness podcasts (although Carlyle doesn’t actually track this, so you can spend it on booze or hamburgers if you like). READ MORE

This Is Why You Keep Hearing About PIPE Deals With SPACs

If you read about SPACs as much as I do, you’ve probably seen the mention of PIPE deals whenever one of these blank-check mergers is announced.

PIPE deals are nothing new, but they’re an area of the SPAC process we haven’t covered very much in this column. And after I had a very interesting conversation about PIPE deals with an investor, I figured we’d tackled PIPE deals and how they relate to SPACs this week.  READ MORE

She’s led 3 private equity backed companies. Here’s what she says you need to know about working at one

Kylie Wright-Ford has an interesting specialty: leading companies backed by private equity (PE) investors. She currently serves as CEO of the RepTrak Company, a reputation intelligence company whose majority shareholder is growth-equity firm Catalyst Investors. Previously she served as chief operating and strategy officer of peer-to-peer community World 50, which also had private equity backers. In all, Wright-Ford has been an executive at three PE-backed companies and served on the boards of three others. She spoke with Fast Company editor-in-chief Stephanie Mehta about the special skills needed to collaborate with private equity investors, and why, in her mind, running a PE-backed firm is “the best job in the world.” READ MORE

How VCs can get the most out of co-investing alongside LPs

It has rarely been easier for people looking to invest. Nontraditional investors, which include anyone outside of traditional VC firms investing in venture capital deals, are increasingly making their presence felt in the investing community.

McKinsey found that the value of co-investment deals has more than doubled to $104 billion from 2012 to 2018. And by some counts, there are as many as 1,600 “nontraditional” investors helping to fund venture capital deals in 2021. READ MORE

Hackers are investing in each other’s operations—just like VCs invest in startups

Over the past few years, ransomware operations have become increasingly sophisticated as they shake down everyday internet users, giant corporations, and government agencies for ransoms that can sometimes total in the millions of dollars. Now, according to the cybersecurity firm LIFARS, the underground world of ransomware is essentially developing its own venture capital ecosystem, with ransomware attackers pooling their funds to back new criminal operations in exchange for a cut of future earnings. READ MORE

No Lockdown For The U.S. Venture Capital Industry In 2020

Even though the coronavirus pandemic had a tumultuous impact on the global economy in 2020 that caused an economic downturn, which the International Monetary Fund described as “the worst recession since the Great Depression,” nothing could be further from the truth for the U.S. venture capital industry. As the global community is managing divergent economic and social recoveries, the U.S. venture ecosystem ended 2020 with a record year, proving itself to incredible resilience and breaking industry records. READ MORE

What’s the deal with all the deals? Why the market for IPOs, venture capital and acquisitions is red hot

Another day, another deal.

Keeping up with the flurry of acquisitions, IPOs, SPACs and venture capital these days is no easy task. In fact, IPO dollar volume for 2021 has already reached $171 billion, surpassing the record totals of last year. Same goes for mergers and acquisitions, with record levels of deal activity tracked for 2021.

The money is certainly flowing. READ MORE

The early-stage venture capital market is weird and chaotic

When SoftBank announced its first Vision Fund back in 2017, TechCrunch gawked at the size of the fundraising vehicle and its $100 million minimum check size. Noting a few of its early deals, we wrote that “the party is just getting started.”

Little did we know how accurate that quip would become. The Vision Fund poured capital into a host of companies with big plans, or what could at least be construed as grandiose hypotheses about the future. And after deploying $98.6 billion in a blizzard of deals, SoftBank left the venture capital market changed. READ MORE