For the stock market, the new year opened with a nosedive worthy of a base jump, with the S&P 500, NASDAQ, and Dow all in the red. The dramatic decline ended up with a nascent, and somewhat hesitant, rebound, but shivers are still running down venture capitalists’ spines. They do indeed find themselves in a tight spot, which ultimately begs the question—will startups go through 2022 empty-handed? Is that a headwind wailing outside? READ MORE
Sequoia Capital plays Nostradamus (again)
Sequoia Capital, the storied, 50-year-old venture firm, has become known over the years for using sweeping memos to warn the founders in its portfolio about market shifts after the shift has become somewhat obvious. READ MORE
How early-stage startups can adapt to the new VC landscape
Benchmark’s Bill Gurley tweeted in April 2022, “An entire generation of entrepreneurs and tech investors built their entire perspectives on valuation during the second half of a 13-year amazing bull market run.” With VCs raising larger and larger funds, startup founders had become accustomed to certain key performance indicators (KPIs) set by VCs who were simultaneously providing mammoth funding rounds. The global economic challenges, alongside a volatile stock market, has resulted in a fundamentally new VC marketplace. Business plans, go-to market strategies, and valuations that had all been tailored to certain VC criteria are being forced to rapidly change. READ MORE
Halfway Through 2022 And The Outlook For SPACs And IPOs Isn’t Good
We’re nearing the end of the second quarter of the year, and it’s been unpleasant to say the least.
Inflation, rising interest rates and the war in Ukraine have caused a lot of volatility in the stock market, with the S&P 500 dipping into bear market territory last week. While last year was a record for both traditional IPOs and SPACs, 2022 so far has pretty much been the opposite. READ MORE
Will a Downturn Give Investors a Cheap Way to Enter Private Equity?
The decline in public markets may translate into an opportunity for investors in secondary transactions in private equity funds. During the last downturn in 2008, institutions, including pensions and endowments, sold stakes in long-term funds at big discounts to raise much-needed cash. READ MORE
What would a VC bust mean for the rest of us?
Two CEOs sounded almost cheerful about the prospect of a tech correction.
They both lead creative agencies with headcounts of around 100 people. Both have long been skeptical of surging investments into software startups — and critical of how business publications like Technical.ly routinely cover such financing news. In their eyes, the phenomenon is less healthy than the more dependable, if mundane, sight of sustainable businesses built on revenue. READ MORE
Amazon: How a Deceleration in the Venture Capital Market Could Affect the Company
A study conducted by the hedge fund Bridgewater Associates has shown big tech companies benefit from startup investing. Higher interest rates, however, can weaken this dynamic. READ MORE
The Week’s 10 Biggest Funding Rounds
Even as more signs mount to a funding shortfall for startups, large rounds are still out there to be had from investors. This week saw three rounds announced in the U.S. at more than a quarter-billion dollars. Biotech and fintech both still seem to strike a chord with VCs even as the market softens. READ MORE
Is climate tech the hottest corner of the VC business in the 2020s?
While government policies and leadership from Washington can help accelerate change, there’s another place that can accelerate change much faster: Silicon Valley. READ MORE
Is private equity joining—or co-opting—the employee ownership movement?
A dragon entering the midst of the employee ownership field—that’s how Jim Bonham, head of the Employee Stock Ownership Plan (ESOP) Association, described the splashy April announcement of a new nonprofit, Ownership Works, which says it aims to create $20 billion in worker wealth through employee ownership over the next decade. Spearheaded by Pete Stavros of KKR, the nonprofit is a collaboration between 60 organizations, including private equity firms, philanthropic leaders, banks, pension funds, and worker advocates. READ MORE
Hedge Fund vs. Venture Capital: Which is best?
As investors accumulate wealth, many look to invest beyond traditional stocks and bonds. Investments through hedge funds and venture capital involve complex structures and higher risk, yet have the potential for outsized gains. Let’s compare the advantages and disadvantages of hedge funds vs. venture capital for your portfolio. READ MORE
Venture Capital: How The World Reached 1,000 Unicorns
Yes, you read the title correctly. The world is at 1,000 unicorn companies as of 2022.
Of course, the term refers to a privately held startup company that has reached $1 billion in valuation. You know some of the major players in the space, like Instacart, Canva and SpaceX. READ MORE
New Startups Help Remote Workers ‘Find Their Tribe’
When Bravado founder Sahil Mansuri moved into a sales career after working in politics, he was surprised at the lack of training and support for sales professionals.
He observed that the vast majority of salespeople weren’t given adequate training, leading to a high turnover rate in companies. And for those who wanted to pursue a career in the field—which can be extremely lucrative in industries like tech—there wasn’t much guidance, or a community where they could connect. READ MORE
Resilience within PE-backed businesses can lead to greater opportunities
According to Preqin’s 2021 Global Private Equity and Venture Capital Report, the global private equity market is now worth more than $4tn. The UK, long the most developed private equity sector in Europe, remains at the centre of this trend. However, as we come out of lockdown there are two sides to this picture – the dry powder available to private businesses, and the impact the pandemic has had on private equity vehicles. READ MORE
Tracking trends in private equity IPOs, mergers and buyouts
For private equity players, the exit landscape has turned barren after last year's deluge.
US PE exit value dropped to an estimated $90.1 billion in the first three months of 2022, marking a 57.5% decrease from the previous quarter, according to PitchBook's Q1 2022 US PE Breakdown. The decline was in stark contrast to the stunning run of last year, which logged four consecutive quarters of over $151 billion in exit value. Additionally, Q1's exit count fell to an estimated 276, down 57.2% from last quarter and below the typical figures of first quarters in recent years. READ MORE
5 Tips to Pitch Investors for Seed Funding
Before venture capital, you will need to raise money to test out your business idea. This initial round of raising funds is called seed funding.
Startup investing comes in many different flavors. There are angel investors, several stages of venture capital, and then, hopefully, an initial public offering (IPO). But before all of that is the seed round. READ MORE
Essential Things to Know About Venture Debt
Raising venture capital comes at a steep cost. Venture debt could be an ideal alternative to bridge the funding gap. Read on to learn how it works.
Raising venture capital is soul-sucking work. You travel around pitching your company over and over to funds that don’t want to lose money. You answer thousands of needling questions and, finally, after months of effort you might get some money -- but not without strings attached. Sometimes you have to give up 20% or more of the equity in your business to raise the capital. READ MORE
Corporate Venture Capital: Using Global Markets To Your Advantage
For corporations to survive in today’s ever-changing business environment, they must innovate. This is true whether your organization is a scrappy startup or a global corporation. But for larger corporations, maintaining a culture of innovation can be difficult. Startups have it in their DNA, but as corporations grow, they often become bogged down in processes, bureaucracies and false security. READ MORE
How Do You Value a Startup?
Value may be the most hotly contested item in your venture capital investment terms. Learn how to calculate it and how to be confident in your estimate.
Valuing your business is important for many reasons. Foremost among those is usually to get a good price in a sale. For that occasion, it makes sense to engage a valuation company which will employ some finance experts to put together the value and then charge you several thousands of dollars. READ MORE
How Do Venture Capitalists Get Paid?
Raising venture capital for your company may get you wondering how the VCs get paid. The answer is management fees and carry.
Venture capital (VC) is one of the premier jobs for recent business school graduates. People will suffer through years of 80-hour weeks in investment banking and, even worse, graduate-level finance courses, just to get an interview with a venture capital fund. READ MORE