SPAC Mergers are Facing Uphill Battles

Today M3-Brigade Acquisition II Corp. (MBAC) became the latest SPAC to call off a merger when it cancelled its planned combination with Syniverse, marking the 9th deal to be called off since December. The company noted that due to the amount of redemption requests it received that they wouldn't be able to meet the minimum cash requirements for the deal. 

Given that Syniverse is backed by Carlyle and counts other major players as investors, it was slightly surprising that more wasn't done to get this deal over the finish line, particularly as they were seemingly close with a shareholder vote scheduled for today.  READ MORE

SEC Chair Gary Gensler wants to know more about what hedge funds and private equity are doing

Securities and Exchange Commission Chair Gary Gensler has kicked off an ambitious regulatory agenda — and his agency is pushing forward with key measures focused on hedge funds and private equity.

The federal agency is meeting on Wednesday to consider three new rules: more disclosure from hedge funds and private equity funds, more disclosure regarding cybersecurity risks and attacks, and shortening the date on which stock transactions must be settled, a fallout from the GameStop saga.  READ MORE

SEC proposes basic rules for private equity, hedge funds

The financiers atop the growing $18 trillion field of private funds — hedge funds, private equity funds and others — would be required, under a new proposal from federal regulators, to provide investors with quarterly investment statements regarding fees and returns.

Although the proposal requires these firms to provide only basic information to investors, the proposal was described as a “sea change” in federal regulation because the Securities and Exchange Commission largely has steered clear of mandating disclosures for such investments. READ MORE

VC Valuations Climb Higher Still as Hedge Funds and Other Nontraditional Investors Pile In

Hedge funds and other nontraditional investors are pumping more money than ever into venture capital deals — driving valuations to new heights, according to PitchBook. 

Early-stage valuations, which includes series A and series B, have gotten so high that they are beginning to resemble the late-stage valuations of previous years. In 2021, the median early-stage pre-money valuation reached $45 million, a 50 percent increase from 2020, PitchBook said in its annual U.S. VC valuations report. READ MORE

Why VC Investors Are Plowing Record Sums Into Agtech

Shifts in how people think about food, investing and even changes brought about by COVID-19 have led to more money—and more deals—in the agtech sector than ever before.

Last year was a record year for agtech, with nearly $5 billion invested in the sector in 440 funding deals to VC-backed startups, according to Crunchbase data. That far outstrips the $3.3 billion invested in 422 deals in 2020. READ MORE

Venture Capital Indicates Crypto Is Maturing From the Bottom Up

Venture capital firms invested more money into crypto startups in 2021 than all the previous years collectively, in a vote of confidence in the potentials of the crypto economy and blockchain technology, reports Alex Thorn, head of firmwide research for Galaxy Digital, in a recent paper.

More than $33 billion was poured into blockchain and crypto startups in 2021 by venture capitalists, with over two-thirds of that going to fundraising rounds. Startups within the crypto economy took in 5% of all venture capital last year, while valuations within crypto and blockchain in the fourth quarter were 141% higher than the rest of the venture capital areas of allocation. READ MORE

Family Offices Ride the Venture Capital Wave

Family offices with venture portfolios have an average of 27 investments, according to a new report. And these investments—17 of them, on average, direct and 10 of them funds—are helping family offices reap the rewards of a worldwide rise in venture capital investing.

A January report by Campden Wealth in London and SVB Capital in Palo Alto, Calif., found the average internal rate of return, or IRR, for venture capital portfolios at family offices was 24% in the 12 months before they were surveyed, up from only 14% a year before.  READ MORE

Private Equity and Private Credit: A Pair of Aces

The challenges facing traditional banks over the last 12 months have proved to be golden opportunities for private lending.

The words “sophisticated capital”, “alternative capital”, and “private credit” once carried at least a hint of differing meanings. Those words would now, however, appear to have converged to reference non-bank (in its traditional sense) lending being extended directly to a borrowing business unit e.g., debt issued by private equity firms, specialty finance firms, hedge funds, and the like. READ MORE

Private equity can lead the charge on ESG strategy

It isn't a surprise that the majority of recent discussion around private equity and environmental, social and corporate governance (ESG) has centered around reporting guidelines and metrics as firms are rushing to meet their investors’ rising expectations on ESG compliance.

While metrics and compliance are clearly important, the private equity sector is missing a far greater opportunity within our reach: we can lead in the creation and propagation of ESG best practices across global portfolios. READ MORE

Adler’s laws of venture capital

I often turn to the advice of my elders. However, as I age, that runway is getting shorter. But there is still a bit of room left, and today let’s meet Fred Adler, born 1926. He is a legendary and successful venture capitalist, who in the 1980s was one of the early kings of the startup business. He was, by his own admission, impatient, arrogant and tough. Others agreed with him, but often included the adjective brilliant as well. READ MORE

Founders, here’s how top VCs are doing due diligence on you

If you’re a founder pitching to a VC, chances are that investors are going to do due diligence not just on your company, but you and your founding team too. We call this “founder diligence”. 

In part one of this series I wrote about how this process is failing investors and founders. Too often, evaluation processes are built on personality tests and frameworks that don’t capture founders’ potential to develop. READ MORE

Supply Chain Funding Shows No Signs of Breaking Down

Nearly two years into the pandemic, supply chain disruptions still dominate headlines as do large funding rounds by tech companies aiming to solve the problem.

Last year was a banner year for venture-backed supply chain management companies, which saw $11.3 billion in funding, according to Crunchbase numbers. That represents almost a twofold increase from 2020 and easily beats the previous all-time high in 2019 which saw $9.1 billion go to startups that look to keep the supply chain moving. READ MORE