These 6 charts show how much VC is awash in capital in 2021

Earlier this year, Silicon Valley-based IVP closed on $1.8 billion for its 17th and largest flagship venture fund, with a stated strategy of placing bets on later-stage, high-growth tech darlings like Robinhood and Coinbase. That was the firm's official narrative for standing up a big new fund, but arguably this says much more about how fund allocators like pensions and endowments are flooding the VC market so overwhelmingly that venture capitalists are barely treading water trying to keep up.

Such is the magnitude of capital being thrown into the asset class by limited partners, who are racing to up their own VC bets in pursuit of ever more exposure to opportunities in the tech boom. READ MORE

New York Investors Take Bigger Bite Of U.S. Venture Pie From Silicon Valley

The San Francisco Bay Area, epicenter of the U.S. technology industry, is home to the FANG in FAANG—Facebook, Apple, Netflix and Google—with Apple the most highly valued company in the world, alone worth over $2.4 trillion.  

So far this year, the Bay Area accounts for about 37 percent of venture dollars invested in the U.S. The Greater New York Area, by contrast, represents less than half that amount, receiving 17 percent of U.S. venture dollars invested.  READ MORE

Is This VC Cycle Virtuous or Vicious?

Public listings of venture-backed companies like GitLab Inc., which priced at a market capitalization of $11 billion and saw its shares pop 35% on the first day of trading last week, are drawing more capital into the private market. GitLab's previous financing round valued the company at $2.75 billion.

The flood of capital to private markets increases competition for venture deals, boosting valuations, increasing paper returns for many funds and allowing them to raise even more money, which they funnel into larger deals at higher valuations. And on and on.

How long will this continue? READ MORE

The Science Of Venture Capital: Making Irreversible Decisions

Many people are unfamiliar with what it means to be a venture capitalist (VC). They imagine luxury and celebrities, million-dollar deals and breaking the mold with (impossible) business models scribbled on napkins. 

While it's true that VCs get to deal with exciting topics like novelty, the future, "what-ifs" and the unknown, the job isn't all glitz and glamour. No matter what your preconceptions are, I think one thing remains true for all VCs: To be a venture capitalist is to know how to make irreversible decisions.  READ MORE

As US Early-Stage Funding Soared, These States Outperformed

U.S. early-stage funding has more than doubled year over year in the past two quarters. But not all tech hubs are sharing equally in the gains.

At least 11 states have seen early-stage funding more than triple, according to a Crunchbase analysis of U.S. states with $100 million or more in Series A and B investment. Top gainers by percentage, deal count and total investment include New York, Florida, Ohio and Michigan. READ MORE

Venture Capital Is Broken—But Who Can Really Fix It?

Geoff Chapin started a very cool company in a very hot space.

C-Combinator, which launched last year, tackles at least two major problems at once. Every year, mountains of seaweed amass on Caribbean beaches and slowly rot, creating not only a tourism-alienating stench but also methane gas, which contributes to global warming. The company scoops up the seaweed and turns it into a variety of products that might otherwise be petroleum-based, including emulsifiers and a kind of natural leather.

You might think that a tech company with a sustainable end product that is also actually preventing greenhouse gases from being released into the atmosphere would be catnip to venture capitalists, those highly specialized middlemen, lavishly compensated to invest other people’s money in companies who rave a lot these days about “climate tech.” And you might be right, but Chapin hasn’t pursued the VC path. READ MORE

Space Force wants to learn how venture capitalists assess startups

An agreement just announced between the U.S. Space Force and a venture capital firm is a pilot project intended to help government buyers understand how investors assess space industry startups. 

The Space Force would like better insight into how venture investors gauge the potential of technologies developed by commercial businesses, said Gabe Mounce, deputy director of SpaceWERX.

SpaceWERX is a new organization within the Space Force’s Space Systems Command. It’s modeled after the Air Force’s technology incubator AFWERX, created in 2017 to attract small businesses and entrepreneurs in the space industry to work with the government. READ MORE

The venture bull market is great for founders, but not in the way they might expect

It seems there’s news every day about startup funding reaching record highs, new unicorns being minted and tech firms going public. There’s no question that we are in the middle of a long-running and accelerating venture bull market.

All of this impresses upon us that every indicator in startup funding points up and to the right: Venture firms have more dry powder, deal sizes are growing rapidly, valuations are soaring and investment terms are more founder-friendly than ever. And all that is indeed happening. READ MORE

Two girls walk into a job fair (or why I raised a VC fund)

I have two daughters, ages 5 and 2. One day, Dora and Ruth are going to head to college. I picture them walking into their senior year job fair, moving from stall to stall to meet prospective employers just like I once did. Who will those companies be? Who will be their leaders? What technology will they build? What will it be like to work there? Will they give my girls a fair wage and a fair shot? Will they feel safe at the office? Will they grow and thrive? READ MORE

Record-Setting Rivian IPO Could Spark More VC Investment Into Red-Hot EV Sector

Electric-truck maker Rivian filed paperwork to go public earlier this month, and is expected to be the largest IPO of the year. That’s especially significant given that Rivian is basically a pre-revenue company and 2021 is already the largest year ever for IPOs in terms of proceeds.

Rivian’s IPO is expected to round out a slew of IPO and SPAC deals from electric vehicle companies over the past year or so. That surge in prominent public-market debuts from EV companies could mean more demand—and funding—for startups that provide support and infrastructure for electric vehicles, industry watchers say. READ MORE

All facets of U.S. venture capital industry are ‘astounding,’ report finds

Venture capital activity reached new highs, through the first three quarters of the year, according to the Q3 2021 PitchBook-NVCA Venture Monitor released today.

Annual records in deals, venture capital fundraising, and exit values were set, according to the report, through just the first three quarters of 2021.

For the quarter, venture capital firms poured in $82.8 billion into 3,518 deals, the report found.  That brings the total year-to-date numbers to nearly $240 billion invested into nearly 13,000 deals.  In 2020, the prior annual record for investment, venture firms put in $166.4 billion. READ MORE

Startups Can Raise From Crowdfunding Sites And Get Their Venture Capital Too

When the SEC changed its crowdfunding regulations in 2020 to allow companies to raise up to $5 million — a big bump from the previous $1 million cap — more startups embraced the method to raise early-stage capital. The change also sparked a debate. While many founders championed the new crowdfunding regulations, saying the strategy allows them to set their own terms and have more control as the business gets off the ground, others in the industry argued that having the guidance of a venture capital firm from the beginning is critical. Almost two years later, many founders are realizing they can have the best of both worlds and raise rounds that include a sleeve for each, as originally reported in Midas Touch newsletter. READ MORE

SEC Leans on SPACs for Detailed Disclosures of Risk, Controls

Wall Street’s top regulator promises to issue new, tougher rules for SPACs, but the agency already has ramped up its scrutiny of the blank-check companies that became market sensations in 2020.

The Securities and Exchange Commission is questioning growth projections, asking for details about risks, and seeking more information about the internal controls of individual special purpose acquisition companies, according to comment letters it has sent to companies. READ MORE

Whistleblowers Are Key to Protecting SPAC Investors

Market enthusiasm for special purpose acquisition company (SPAC) investments has reached unprecedented heights during the last two years, stoking the concern of the Securities and Exchange Commission as it seeks to protect investors in these transactions.

With stepped up SEC enforcement, the timing is ripe for whistleblowers with knowledge of securities law violations to consider providing the SEC with information about potential SPAC securities law violations. Whistleblower’s can be eligible to receive substantial financial awards for providing useful information to the SEC, but would be well-advised to speak in advance with experienced whistleblower counsel. READ MORE

NEXT BILLION-DOLLAR STARTUPS

For the seventh year in a row, Forbes has teamed up with TrueBridge Capital Partners to search for the country’s 25 venture-backed startups most likely to become unicorns. TrueBridge asked some 300 venture firms to nominate companies, while Forbes reached out directly to 80 startups. Then came the deeper look, as we analyzed finances and interviewed founders and investors. A $1 billion valuation isn’t what it used to be, as companies reach that milestone at breakneck speed. Even startups with barely any revenue are earning sky-high valuations as investors bet on future growth. READ MORE

Perspectives on a career in venture capital from five investors

Upon first inspection, their respective paths into venture capital (VC) have very little in common. 

Jessy majored in philosophy and English literature at the ANU, worked in an electorate office, and spent two years in management consulting, before joining NAB Ventures as a senior investment analyst. After one and a half years there, Jessy is now an investment manager and head of community at AfterWork Ventures.  READ MORE