How VCs Can Help Startups Set (and Meet) ESG Goals

The complex challenges the world faces today — climate change, the energy transition, and growing inequality just to name a few — have forced large, incumbent companies to take action, reinventing their business models in some cases or radically re-engineering their products, services, and operations in others. These actions are crucial to securing a sustainable future. But large companies can’t do this alone. Indeed, they shouldn’t. Young, fledgling ventures need to be part of these solutions, too. READ MORE

Do you need a big market to raise venture capital?

One evening when I was in graduate school, I was invited to an event held by the Young Presidents Organization (YPO). At the time, I didn’t even know what YPO was, but it sounded interesting, so I went. I ended up in a conversation with a guy who mentioned, in passing, that he’d flown in for the event on his plane. As also evidenced by his apparel and expensive watch, I knew this guy had made it, so I asked him about his company. “Oh,” he said, “I make bike reflectors.” “What?” I responded. “You make bike reflectors?” He replied, “Yeah. Turns out that no one really cares about bike reflectors, so I pretty much own the market.”

As a budding young MBA, I reflected on this experience as I returned to my apartment. How big would the market be for bike reflectors? How could anyone afford a private plane and wear Rolex watches making something so basic?  As I thought about it, I realized it was simple—create a monopoly. Monopolies have pricing power, and pricing power means outsized profits. READ MORE

US start-ups raise record $330bn as venture investors vie for stakes

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Investors poured a record $330bn into private start-ups in the US last year, nearly doubling the total from 2020 in a flurry of dealmaking that rapidly inflated company valuations. Venture capitalists vied with other deep-pocketed investors to win deals, giving leverage to the founders of attractive start-ups. Investors gained confidence from a wave of public listings that have delivered large returns to their backers, such as foundations and endowments. READ MORE

U.S. Venture Capital Shattered Records in 2021

The past year was record-breaking for U.S. venture capital. 

In 2021, U.S. investments in venture capital exceeded $300 billion for the first time, nearly doubling 2020’s $166.6 billion figure, according to an early look at PitchBook’s fourth quarter venture monitor. PitchBook analysts also noted an “exceptionally robust” year for VC mega-deals — deals valued at $100 million or more — which produced $190.8 billion in deal value.  READ MORE

ESG is coming to venture capital. Here’s how startup founders can stay ahead of the curve

If you’re a startup founder who has raised venture capital (VC) funding or is looking to do so, you know that global VC funding hit USD 454 billion in the first three quarters of 2021, up from USD 332 billion in 2020 over the same period.

What’s interesting is that early-stage funding grew at 104% year-over-year in 2021 to peak at USD 49 billion. VC firms are therefore a critical force in shaping the future of people, planet, and society as they continue to invest in the leading companies and disruptive technologies of the future. READ MORE

Private Equity, Venture Capital Employee Compensation Up in 2021

Private equity and venture capital employee compensation is up in 2021 for the eighth straight year, according to the 2022 Private Equity and Venture Capital Compensation Report from Benchmark Compensation in Ann Arbor.

The percentage of respondents earning $150,000 and below has continued to decline and those earning from $151,000 to $1 million increased to 80 percent of respondents. This is the highest percentage of private equity and venture capital professionals reporting earnings more than $150,000 in annual compensation in the history of this report. READ MORE

Tech deals drive PE’s blockbuster year

Private-equity firms had a blockbuster year for deal making, largely driven by technology investments.

As of mid-December, private-equity firms had announced backing U.S. technology deals totaling $401.71bn, including new purchases, asset sales and add-on deals, according to data provider Dealogic. That accounted for 41% of a record $990.25bn in overall private-equity deals through mid-December, Dealogic said. READ MORE

What to watch for in the 2022 IPO market

After a rambunctious year for public listings, an evolving market now threatens to end the good times. Both SPACs and traditional IPOs have given underwhelming stock market performances, and inflation is leading to interest rate hikes that could weigh on valuations.

But there are still plenty of reasons to believe that PO activity will be strong in 2022. For starters, there's an abundance of IPO-ready companies thanks to a decade-long buildup of venture-backed startups. READ MORE