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Venture capitalists rewrote the record books in 2021 — in more ways than one.
Not only did VC investments eclipse previous all-time highs in the U.S. and across the globe, swelling industry assets placed pressure on investors vying for deals to fund companies at a frenzied pace, leading VC firms to scan pitch decks and back startups faster than ever before. READ MORE
The global startup fundraising boom has lifted nearly every sector you can name: Edtech took off during the pandemic, software in general got a lift, and even more risky and long-term wagers like space tech and biotech are seemingly doing well in today’s risk-on startup fundraising market.
But no single category or niche in startup land has done better than financial technology, or fintech. READ MORE
While global tech and finance leaders have suggested that the world’s first trillionaire will be someone tackling climate change and that many climate unicorns are on the way, current VC levels are dwarfed by the mind-boggling funding amounts that are needed to give humanity a fighting chance. READ MORE
Since the Ant Group IPO was canceled by central authorities, China’s government has been on a regulatory tear.
You know the broad outlines: After a lengthy period of growth, capital investment and aggressive business practices, China’s central government spent much of 2021 reining in its technology sector. While some of the actions were reasonable from an antitrust perspective, many of the changes to the country’s tech sector appeared more punitive toward entities viewed as too powerful. READ MORE
A regulatory proposal by the Securities and Exchange Commission to make some companies disclose more financial information could throw cold water on the booming market for massive private-equity deals.
Wall Street's top regulator is weighing a plan to significantly increase the amount of information private companies with 2,000 or more shareholders must disclose about their finances and operations, The Wall Street Journal has reported. READ MORE
do not want this morning column to become Old Man Shouts at Stocks; that’s not its goal. To prevent that from happening, we’re flipping the script today.
Instead of talking about what the public markets are doing and how their moves may impact startup valuations, we’re going to ask when VCs will hit the brakes. READ MORE
In nine years as a VC, I have seen many founders misinterpret the standard advice to ask potential investors questions during pitch meetings. READ MORE
Venture-backed fintech companies carried out many of the largest market debuts of the past year. But while most did well at first, aftermarket performance has been choppy.
Among recently public fintechs, more than a dozen fall into the category of “truly terrible performers”—with shares trading far below their initial offer price, according to an analysis of Crunchbase data. READ MORE
We’ve seen that 2021 is a record-setting year for investment in VC-funded startups and private companies. This vast global liquidity has caught the eyes of non-traditional investors including sovereign wealth funds and limited partners, both of whom are looking to boost returns with direct investments. This makes it a buyer’s market for startups, and the best entrepreneurs have access to what seems like unlimited capital. READ MORE
Veteran investors have been nervous on and off for several years about the risk of a potential bubble forming in the venture capital markets. That anxiety has been especially pronounced among VCs who saw their portfolio companies obliterated in the dot-com crash of March 2000. READ MORE
Crypto.com, a popular cryptocurrency exchange, has extended its venture arm’s fund size to $500 million as it looks to more aggressively back early-stage startups to help the nascent ecosystem grow, following similar moves by rivals Binance, Coinbase and FTX. READ MORE
Even as the venture capital industry shattered all records last year, it also continued to see significant changes to how it operates and its place in the startup ecosystem.
Last year saw seismic changes brought about by the likes of large hedge funds such as Tiger Global and Coatue pouring money into venture-backed startups and spiking valuations. It also saw some legacy players change the way they play the venture game, including Sequoia Capital’s plans to change its fund structure. READ MORE
The startup and venture world has a lot to live up to in 2022, after a year that pretty much broke every record.
With the big caveat that we of course can’t foresee the future—who would have predicted at the start of 2020 that a pandemic would upend lives globally, but ultimately lead to a monster rally for the tech industry?—we nonetheless gazed into our crystal balls and came up with our best educated guesses for what 2022 has in store. READ MORE
We don’t use many exclamation points when writing about startup funding. But the 2021 North American annual tallies require at least a few.
In short: It was a really big year for funding! Really, really big!! It was record-setting big, and not by a small margin!!! READ MORE
With the VC market as frothy as it is and investors chasing growth in earlier and earlier stage funding rounds, nascent startups are facing pressure to “grow up” faster and act more like later-stage companies.
The ballooning of seed rounds has led to seed companies acting like Series A companies all the way down the line to Series C companies acting like publicly traded ones. This wasn’t always the case, but the trend is here and won’t be going away any time soon. READ MORE
Private equity has been growing as an asset class with total assets under management reaching $6.5 trillion in 2020 vs. $2.4 trillion in 2010. While this growth in private equity has been going on for quite a while, driven by the search for higher returns in a low yield world, a more recent phenomenon has been the growth in the private equity secondary market. The secondary market, where buyers and sellers trade existing interests in private equity funds and their portfolio companies, has grown to almost $90 billion, a six-fold increase during the past decade. READ MORE
Small-town manufacturing has become big business. Private equity companies in the U.S. have set their sights on American manufacturing as a great investment opportunity. They have shown a particular interest in the 25,000 small manufacturers across the country that are each generating less than $10 million in annual revenue. These shops are increasingly being purchased and quietly rolled up, along with entire supply chains for original equipment manufacturers (OEMs). READ MORE
Private equity and venture capital are colliding in one of the hottest alternative investment trends. READ MORE
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
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
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