Five Steps To Testing Your Startup Idea For Success

As a chief business development officer for an international software development agency, I communicate with startups from all over the world. Consulting and helping to make everything possible for the most innovative idea to hit the market is part of my daily work. I am lucky to see how ideas result in amazing products through monitoring new startups. Unfortunately, not every new digital idea is warmly welcomed by today’s users. It is common to encounter errors that result in failure and financial loss despite significant investments. READ MORE

Series A, Series huh? Primer on venture capital funding

Venture funding is not for the faint of heart, or for those in a hurry for return. Forbes says 90 percent of startups are bound for failure; venture firms aim to throw many seeds on fertile ground in hopes a few will take off and become the “unicorn” companies valued at $1 billion or more a decade or more into the future. Experts recommend only risking a small portion of your investment portfolio on startup funds. READ MORE

Mission and Money Clash in Nonprofit Hospitals’ Venture Capital Ambitions

Cone Health, a small not-for-profit health care network in North Carolina, spent several years developing a smartphone-based system called Wellsmith to help people manage their diabetes. But after investing $12 million, the network disclosed last year it was shutting down the company even though initial results were promising, with users losing weight and recording lower blood sugar levels. READ MORE

Cybersecurity VC funding surges to a record $11.5B in 2021

The pandemic completely upended the threat landscape as we know it. Ransomware accounted for an estimated 2.9 million attacks so far in 2021, and supply-chain attacks that targeted Kaseya and SolarWinds have increased fourfold over 2020, according to the European Union’s cybersecurity agency, ENISA, which recently warned that the more traditional cybersecurity protections are no longer effective in defending against these types of attacks. READ MORE

Future tech exits have a lot to live up to

Inflation may or may not prove transitory when it comes to consumer prices, but startup valuations are definitely rising — and noticeably so — in recent quarters.

That’s the obvious takeaway from a recent PitchBook report digging into valuation data from a host of startup funding events in the United States. While the data covers the U.S. startup market, the general trends included are likely global, given that the same venture rush that has pushed record capital into startups in the U.S. is also occurring in markets like India, Latin America, Europe and Africa. READ MORE

An Insider’s Perspective On VC Craziness And The Startup Bubble

A few years back, I wrote an article titled, “700 Million Reasons to Question Everything Venture Capitalists Do.” Why 700 million? Because that was DoorDash’s “disappointing” valuation at the time. It was seen as an indication that VCs might finally be coming to their senses after a year of seemingly round-the-clock unicorn production — 10 a month — that ended with a $9 billion bang: the Theranos blood-testing debacle. READ MORE

SPACs fall out of favor

SPAC enthusiasm is slowing, as evidenced by rising redemption rates.

Between the lines: "Redemption rates are very much a barometer of market sentiment," explains SPAC Research founder Ben Kwasnick. Higher redemption rates mean that investors are skeptical of the market and the deals — choosing to pull their money instead of risking losses if the stock price dives. READ MORE

Private equity touts its ESG cred but ups its bets on defense deals

In the same week that Afghanistan's capital, Kabul, fell into the hands of Taliban militants, ushering in a new era of regional instability, two major deals in the defense sector also hit the headlines.

On Monday, Advent International-owned British aerospace company Cobham agreed to buy Ultra Electronics, a major UK supplier of sonar equipment to the Royal Navy, for nearly £2.6 billion (about $3.5 billion). A day later came news that TransDigm—a US-based aerospace company that counts The Vanguard Group among its investors—is seeking to acquire UK aerospace defense specialist Meggitt. READ MORE

Private equity keeps the Spac train running

The frenzy for blank-cheque companies may be cooling, but private equity is working hard to stoke one corner of the market.

Private equity firms are turning to these vehicles, known as special purpose acquisition companies, or Spacs, to speedily cash out their investments. At the same time, buyout groups including Apollo Global Management, Ares Management and KKR have launched Spacs of their own. READ MORE

‘The tortoise and the hare’ story is playing out right now in VC

The unprecedented liquidity that has entered the venture market in the past year has spurred several trends that require VCs to adapt to a more competitive environment where startup founders have far more leverage than they did in the past.

Structurally, there are only so many startups looking to raise capital, and even though some founders may be opportunistically pursuing deals they wouldn’t have previously, the supply of capital into venture funds has nonetheless outpaced the demand for those dollars. READ MORE

Is Venture Changing?

Good day. Last week, we asked about the lessons from previous climate-tech disappointments investors are applying to the renewed surge of interest in the sector.

Despite a sharp focus in 2019 on lessons learned from the first wave of climate investing, "the market is so hot that most of the accepted 'lessons' have gone out the window -- VCs are pouring money into climate-tech companies with significant technical risk at soaring valuations," said Piva Capital partner Bennett Cohen. The bull case is that the easy money will support the exit markets for these companies, Mr. Cohen said. READ MORE