The tech sell-off has some venture capitalists worried the good times may be coming to an end

After a blockbuster year for venture capital deals, some investors worry the boom times may not last much longer. 

Tech start-ups raised a record $621 billion in venture funding globally in 2021, according to CB Insights, up more than double from a year earlier. The number of privately-held “unicorn” firms valued at $1 billion or more rose 69% to 959. READ MORE

Venture capitalists fell in love with Europe last year

Amid this long-lasting startup era, 2021 may go down as the peak venture capital year.

When The Exchange looked at global data for venture capital activity in 2021, we used words like “bonkers” and “record-setting.” Those might have been a little modest when we compare just how much the venture asset class has grown from comparatively humble beginnings. To put it into perspective, per CB Insights 2021 data, venture capital activity around the world was up around 4x since 2016, and 2021 more than doubled 2020’s record-setting result of just under $300 billion in total activity. Last year saw more than $620 billion invested in venture rounds, the data provider reports. READ MORE

What’s Behind The Sad State Of Q1 IPOs

After a blockbuster year for the IPO market, the outlook for the first quarter of this year seems quiet.

Concerns over inflation have spurred a massive selloff across the board, with stocks taking a nosedive and the IPO window effectively closing. Companies that went public last year have seen weak performance, with the average 2021 return from the offer price around negative 25 percent, according to Matt Kennedy, a senior strategist at IPO research firm Renaissance Capital. Only about a quarter of last year’s IPOs are trading above issue, he added. READ MORE

Unicorns Are Being Minted In Earlier Rounds Like Never Before, Valuations Skyrocket

Not only were new unicorns minted at a breakneck pace in 2021, but they were created in early-stage funding rounds at an unprecedented rate.

While nearly 600 new unicorns were minted last year, about 18 percent were companies reaching  that status after an early-stage funding round—defined as seed, Series A or Series B, according to Crunchbase data. Last year saw more than 100 unicorns created through early funding rounds, nearly 5x the number in 2020. READ MORE

How On-Demand Talent is Unlocking Value for Private Equity Investments

One constant about private equity is that the landscape is always changing. For some, those changes can lead to obsolescence; but for those with vision, change is an opportunity to unlock new opportunities for alpha returns, according to a new report from Upwork. “One relatively slow-moving change? The differentiating levers that a PE firm can pull as part of its value creation strategy,” said report author Tim Sanders, Upwork’s VP of customer insights. “It’s taken decades of evolution, but we’ve arrived at the doorstep of a newly emergent PE value creation driving force: talent transformation,” he said. READ MORE

Venture capital firms lack ability to focus on ESG

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

Looking for startup funding? Here are 28 terms you need to know

Want to launch a startup but have no idea how to fund it?

Lucky for you, Technical.ly wants to help you solve that problem. While we report on startups, nonprofits, government and more as they pertain to local tech economies, we also recognize that much of our financial reporting centers on venture capital, plus the occasional philanthropic grants. The former has become one of the most common financial tools used in the startup world — check out the record-breaking VC numbers for 2021. But that doesn’t mean it’s right for everyone. READ MORE

Venture Capital Set Records in 2021, Faces Headwinds in ’22

2021 was a spectacular year for the American venture capital ecosystem, with VC investments, fundraising and exits all setting new highs. That according to the latest PitchBook-NVCA Venture Monitor, the self-described definitive review of the U.S. venture capital ecosystem. Nevertheless, it is difficult to predict how 2022 will turn out for the VC industry, as it remains to be seen to what extent the tremendous amount of VC fund dry powder will be offset by the headwinds generated by outsized valuations, stock market volatility and inflation-induced interest rate hikes. For now, let’s take a look at how well the VC industry did this past year. READ MORE

VR/AR Investments Increase Just As Metaverse Talk Heats Up—But That May Not Be The Only Reason

Although the term metaverse has been around for nearly 30 years—coined in the novel “Snow Crash”—Facebook’s name change to Meta in late October seems to have reignited investors’ interest in the virtual and augmented worlds that play a role in the concept.

Last year’s fourth quarter was unlike any other as far as venture interest in the VR/AR space. Nearly $1.9 billion of venture capital rolled into startups in the virtual and augmented reality software and hardware space—more than any quarter ever, according to Crunchbase data. READ MORE

The 29 year old MBAs earning $650k in private equity

Now that there are Goldman Sachs VPs apparently earning seven figures for their efforts in M&A, getting paid $650k as a newly qualified MBA in private equity might not seem a particularly huge deal, but it's worth noting given that MBAs don't necessarily have prior finance experience, and they may get paid carried interest on top. 

Not all MBAs going into private equity get this amount. If you go to a second tier business school, you will not be paid $650k upon graduating. However, if you go to Stanford Business School, and you're one of the lucky ones, $650k is a possibility. READ MORE

A Peek Inside the Hidden, Messy World of Corporate Venture Capital

“If you look at the large Fortune 500 companies 50 years ago, many of them no longer exist,” says Ilya Strebulaev, a professor of finance at Stanford Graduate School of Business. “The big reason why was their failure to innovate.”

Historically, large corporations kept up with innovation through in-house R&D and mergers and acquisitions. Yet it’s only in the last decade that corporate venture capital (CVC) has gained traction as a way to remain relevant and stay ahead of competitors. In 2020, corporate venture capital arms invested more than $70 billion in startups, accounting for a quarter of all VC deals. READ MORE

Venture capital firms lack ability to focus on ESG

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

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