Some venture capital managers may be interested in considering ESG factors in investments, but many lack adequate resources to apply those considerations and influence over portfolio companies and do not consider ESG to be material to the asset class, according to a report released Monday by the Principles for Responsible Investment, a United Nations-supported network of investors representing more than $121 trillion in assets. READ MORE
Is algorithmic VC investment compatible with due diligence?
In algorithmic investing, investors use a company’s metrics to decide whether to participate in a deal. But when the art of choice is factored out, it becomes more difficult to perform deep due diligence on founders who may be about to receive millions of dollars via a wire transfer.
In practice, attempts to remove bias can create newer, blind spots that are harder to identify. READ MORE
VCs approached Facebook to fund a spinout of Workplace valued at over $1B, but Facebook declined
Workplace -- the app originally built as a version of Facebook for employees to communicate with each other -- now has more than 7 million users, carving out a place for itself as an app to help companies communicate internally using essentially the same tools that have proven sticky in their lives with friends and family. That traction, it turns out, has been giving Workplace attention of another kind. READ MORE
A blockbuster year for VC had firms race through pitches at the fastest rate ever
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 berserk pace of fintech investing outshines the global VC boom
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
5 areas where VCs can play an outsized role in addressing climate change
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
Changes to corporate investing rules could diminish China’s resilient venture landscape
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
Private equity deals under SEC scrutiny for more disclosure
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
When will VCs hit the brakes?
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
If you want startup funding, don’t make VCs feel ignorant
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
A Lot of Recently Public Fintechs Have Seen Share Prices Plunge
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
Why Strategic Venture Capital is Thriving in a Founder's Market
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
Are venture capital's go-go years about to end?
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 expands venture arm to $500 million to back early-stage web3 startups
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
As Venture Capital Continues To Change, What Will 2022 Bring?
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
Here Are Our Top 9 Predictions For What 2022 Has In Store
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
North American Startup Funding Scaled Unprecedented Heights In 2021
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
Startups Are Being Pressured To Mature Faster
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
Why the Private Equity Secondary Market is Poised to Grow
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
Why private equity is investing in manufacturing
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