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As the third quarter comes to a close, preliminary data shows that the venture market's furious pace held, according to Ernst & Young U.S. venture-capital leader Jeffrey Grabow.
During the quarter, $62 billion in U.S. venture investments were made, raising the year's total to $205 billion. Deals in startup sectors including information technology, business and financial services, and healthcare helped power the quarter, according to Mr. Grabow. READ MORE
Given the surplus of liquidity in the markets, entrepreneurs have access to more funding options than ever before. Venture banks, venture debt funds and venture capitalists are each jockeying to prove how their money is greener.
Nonetheless, each has constraints that dictate their behavior. While a venture capitalist may swing for the fences in each investment they make to get outsized returns, one home run can make up for nine strikeouts. Contrarily, most banks are playing Billy Beane’s Moneyball — they try to get the entire lineup on-base while making as few outs as possible in the process. READ MORE
Somehow the third quarter of 2021 is coming to a close. Instead of a period filled with family and friends and fun, in many parts of the world, the COVID era dragged on, leaving us largely working from home and executing more phone calls than impromptu brunches. Alas. READ MORE
Around 90% of startups ultimately fail, and the reasons leading to failure are well known: Undercapitalization, scaling challenges, lack of a competitive advantage or realistic IP. However, what about the 10% that succeed? What did they do to beat the odds?
To create a pathway for market success, startups need two essential assets groups: venture capital and creative capital. READ MORE
As private equity firms strive to become more inclusive, chief diversity officers from three firms with advanced strategies spoke at our M&A’s Leaders in DEI Speak event and shared their approaches. Mergers & Acquisitions recently recognized all three in our inaugural PE Leaders in DEI list, featured in our September issue.
“Carlyle, through its over 200 portfolio companies around the world, employs nearly 1 million people, so it’s a pretty exciting platform to drive change broadly,” said Kara Helander, managing director, chief diversity, equity and inclusion officer, Carlyle Group Inc. (Nasdaq: CG). The firm has recently tied compensation to progress on diversity, equity and inclusion, starting with the CEO and giving DEI Incentive Awards to employees. “You pay for what you care about and what matters. We’ve given $2 million to 50 of our colleagues who have gone above and beyond in driving DEI in the firm.” READ MORE
For a few years now at Crunchbase News, we’ve been tracking the relationship between a tech company’s valuation and the number of people it employs.
Consistently, the finding has been this: Recently public tech companies have gotten much bigger in terms of valuation, but not so much in terms of staff size. READ MORE
CEOs who helm companies owned by private equity (PE) firms face a leadership challenge unlike any other. They must master everything a great public- or private-company CEO does, all while operating at a higher metabolic rate. A newcomer to PE also faces the conundrum of having limited access to insight about the road ahead, because there is so little specific guidance in print about the portfolio-company CEO role. Its unique demands and nuances, however, need not be a mystery. READ MORE
Politicians on both sides of the Atlantic who have long argued that the government should carve a larger slice out of private equity and venture capital profits could be closer to getting their way.
The end result could not only eat into private equity profits but could even undermine an important tool for aligning the interests of fund managers and their investors. READ MORE
When President Joe Biden unveiled his American Families Plan in the spring, many venture capitalists seemed to shrug.
Sure, the capital gains tax was poised to go up—from 20 percent to up to 39.6 percent for high earners—but their favorite tax break as investors seemed almost certain to go untouched. READ MORE
A two-year increase in the number of years private equity firms must hold on to their investment for partners to get the 20% capital gains tax rate could have a small impact on the terms of capital going to operating companies. READ MORE
During last week’s testimony before the Senate Committee on Banking, Housing, and Urban Affairs, the questioning of SEC Chair Gary Gensler focused on the expected topics of cryptocurrency regulation, ESG disclosures, and gamification. But Gensler’s written testimony circulated beforehand reminded the marketplace that private funds, including private equity, will continue to be a focal point. READ MORE
Kleiner Perkins is one of the most storied venture capital firms in Silicon Valley, making early investments in companies like Genentech, Amazon and Google, and serving as home to big names over the years including John Doerr and Al Gore.
Kleiner, which celebrates its 50th anniversary next year, has always gone through iterations in its many decades of venture investing. READ MORE
The ongoing tidal wave of employees quitting their jobs in search of more money and flexibility—also known as the Great Resignation—has not spared investment firms.
New data shows that 27% of venture capital, corporate venture capital and private equity firms lost a partner or key recruit in 2021, according to a recent J.Thelander-PitchBook survey of more than 760 respondents. More than 40% of those who quit joined a competitive firm, while 16.1% launched their own firm or company. READ MORE
Google the phrase “WeWork going public” and among the questions that pop up are: “When did WeWork go public?”
The answer is, it never really did. But late next month, retail investors will finally have the chance to own a piece of the co-working giant.
WeWork announced Monday that its merger with a special purpose acquisition company, floated in January and announced in March, will be completed a month from now. READ MORE
Senator Elizabeth Warren and three other Democratic lawmakers have sent an open letter to the executives behind popular SPACs, raising concerns about the potential for insiders to exploit regulatory gaps at the expense of everyday investors.
"We seek information about your use of SPACs in order to understand what sort of Congressional or regulatory action may be necessary to better protect investors and market integrity and ensure a fair, orderly, and efficient marketplace," the senators wrote Wednesday. "We are concerned about the misaligned incentives between SPACs' creators and early investors on the one hand, and retail investors on the other." READ MORE
New data released by Crunchbase shows that only 2.2% of all venture funding went to female-founded startups in the first eight months of this year. For Black women, it was a minuscule 0.3%.
Deena Shakir, a partner at venture capital firm Lux Capital, told CBSN that although women entrepreneurs have made progress when it comes to raising money, "There is still so much work to be done."
"The vast majority of venture capital firms still do not have a single woman check writer at the table," Shakir said. READ MORE
The world is throwing all sorts of adversity our way, and business hubs—no matter how developed—are not immune to the turbulence. Natural disasters restrict supply chains, political unrest forces companies to close stores, and cybersecurity failure comes with high-cost infrastructural improvements.
These are just a handful of possible crisis scenarios, and they reinforce the need for businesses to make contingency plans now to maintain stability during inevitable future shockwaves. READ MORE
The once red-hot SPAC market continues to be touch and go, at best.
Third quarter to-date, an average of six SPAC [special purpose acquisition company] IPOs have raised $1.2 billion in total capital each week, according to fresh data out of Goldman Sachs on Thursday. That pace is down sharply from the boom period seen in the first quarter, when an average of 21 SPACs raising $6 billion in capital came to market each week. READ MORE
Transactions involving a Special Purpose Acquisition Company (SPAC) accounted for more than 50% of new publicly listed US companies in 2020. Described as the new way to go public, SPAC transactions have proven to be an effective way to raise capital. SPACs are used in a variety of sectors and the clean energy space is no exception, as the number of renewable energy SPACs keep growing. This article will briefly explain why “green SPACs” became so popular and why, despite the challenges in the SPAC market, the green SPAC frenzy is likely to continue. READ MORE
Private equity deal activity involving midsize companies is running at full tilt as cash-flush lenders help buyout firms finance acquisitions, driving leverage to levels not seen since before the financial crisis.
Private-equity firms invested a total of $264.6 billion across 1,721 midmarket deals in the U.S. during this year’s first half, or more than two-thirds of the $393.5 billion invested across 2,662 deals in all of last year, according to research provider PitchBook Data Inc. PitchBook said the industry is on track to surpass the record annual total of $416.3 billion for the segment reached in 2019. The researcher defines the U.S. “core” midmarket as businesses valued from $100 million to $500 million. READ MORE