There’s no way around it: We’re in a bear market, and layoffs are hitting startups across sectors. Even though many investors are sitting on freshly raised funds, VC purse strings have tightened. READ MORE
Which Startup Sectors Are The Bulls And Bears In 2022’s Sluggish VC Market?
Last year saw unprecedented investment into startups, with seemingly almost every sector notching new records for funding.
This year? Not so much. Venture funding overall is retreating amid public-market turmoil, record inflation and rising concerns about an economic recession. Even so, several startup sectors stand out—either for still outperforming, or for being particularly hard-hit by the venture pullback. READ MORE
As Venture Dollars Slow, Deal Terms Begin Trending Back Toward Investors
Last year at this time, venture dollars flowed freely and founders could name their own terms and prices on deals.
There were stories of investors putting up money without meeting the founding team, not doing full due diligence, and agreeing to valuations far from the scope of any reality—all in an effort to not miss out on the “next big thing.” READ MORE
VCs flock to TikTok to reach the next generation of founders and investors
In January, Redpoint Ventures gave Rashad Assir one task: Make TikToks about venture capital.
At the time, Assir ran his own TikTok account, creating satire about corporate life and tech trends, amassing more than 56,000 followers and 2.4 million likes in the process. Meanwhile, Redpoint Ventures had just launched a media operation to connect with the next generation of founders and VCs. The firm figured TikTok was the place to make those associations and Assir would be the one to do it for them. READ MORE
Venture Investors See Potential In Data Observability
It’s unlikely the term “data observability” gets most folks too excited. Unless they are investors. We’ve seen several startups in the space raise serious cash over the last couple months.
In fact, in the span of one week three companies alone raised more than $400 million. This shows the significance of a sector that helps companies review, evaluate, index and, in general, control what has become the lifeblood of so many large enterprises—their data. READ MORE
Wall Street's blank-check boom has gone bust
The once hot blank-check merger trend is fading fast.
The stock market has been cratering so far this year — leaving special purpose acquisition companies, which buy private firms in order to take them public without the need for a traditional initial public offering, with difficulty finding targets. READ MORE
Private equity investment in renewable energy soars
Private equity and venture capital investment in renewable energy increased about 144% to $11.92 billion across 33 deals in the year to May 23 from $4.89 billion across 33 transactions recorded in the same period in 2021, S&P Global Market Intelligence data shows.
The figure in 2022 is fast approaching the full year 2021 private equity investment in the sector of $14.66 billion. READ MORE
PE returns at near record levels
The proportion of investors reporting net annual returns of over 16% across the lifetime of their private equity portfolios has reached near-record levels, according to Coller Capital’s latest Global Private Equity Barometer.
Some 42% of Limited Partners (LPs) now have portfolio-lifetime annual returns of over 16% net. This number has been exceeded only once since the Barometer was first published in 2004: in the Barometer of Summer 2007 in the run-up to the Global Financial Crisis (GFC). READ MORE
4 Reasons Why Funding for Female-founded Businesses Is Skyrocketing
Historically, it has been enormously challenging for women-owned businesses to secure funding, but the situation took a turn for the worse in 2020 following the outbreak of COVID-19. Despite a significant rise in overall U.S. venture capital investments, startups founded solely by women raised $1 billion less than they had in 2019, representing a deal count decline of 2.2% and a 3% decrease in total dollars invested. READ MORE
16 Important Questions To Ask Yourself Before Seeking Business Capital
Seeking capital for your business is a big decision that involves many moving parts. Leaders have to decide where to take the capital from, the amount of capital that they need and what they plan to use it for.
Borrowing money can help a business in the short term, but hurt it in the long term if the wrong decisions are made. Before seeking capital, there are important questions that leaders should ask themselves, such as what the capital will specifically be used for or what kind of investor might be the best contact. READ MORE
The market correction has come for Series A and seed startups
After being largely unaffected by the pressure that market turmoil has put on larger tech companies, early-stage startups are beginning to feel the chill.
Changes in the market climate often come quickly, but those trends can take awhile to show up in a comprehensive dataset. But deal-by-deal, anecdotal evidence gives investors a good sense of which way the winds are blowing. READ MORE
Biotech Startup Funding Has Also Slowed In 2022
After peaking in 2021, venture funding to biotech startups slowed in 2022, with investment on pace to come in at least a third lower than last year’s levels.
The slowdown comes amid a broader pullback in global venture funding. Across all sectors, investment hit its zenith in November and has been cresting downward since. On the exit front, meanwhile, the pace of venture-backed IPOs has slowed to a crawl. READ MORE
BuzzFeed becomes latest SPAC to blow up as stock slides 40%
Shares of digital media upstart BuzzFeed nosedived 40 percent on June 6 at the US stock exchanges, driven by heavy volumes on suspicion that many of the company’s older investors are selling the stock.
The sell-off saw the company’s market value slide to $300 million, which was less than the price AOL paid for Huffington Post in 2011, which was later sold by Verizon to BuzzFeed. BuzzFeed listed on the US bourses in December 2021 through a reverse merger with a special purpose acquisition company or SPAC at a valuation of $1.5 billion. READ MORE
Startups are on track to acquire more VC-backed companies than ever in 2022. Here’s why
Amid a venture funding decline and dearth of IPO activity, startups have found a new way to occupy their time: buying other startups.
The notion of startups acquiring other VC-backed companies is nothing new. Meta bought venture-backed Instagram a month before Facebook’s May 2012 IPO; food delivery company GrubHub merged with Seamless in 2013 when they were both still operating off venture funding. But up until the last few years, these transactions were mainly large and infrequent. Now, they are getting smaller and more frequent. READ MORE
Will VC Funding Catch Up To Record Year For U.S. Weddings?
This year is slated to be the busiest for weddings in the United States in nearly four decades. So while venture funding to wedding-related startups has been on the decline in recent years, that could change as many more couples tie the knot.
Funding to VC-backed startups in the wedding category over the past decade peaked in 2018, when companies in the space raised $543 million. A big factor then was that two of the most prominent players in the category—WeddingWire and Zola—raised very large rounds. READ MORE
The SPAC market's miscalculation
Nineteen companies have canceled SPAC mergers in 2022, including this past week's terminations for Forbes and SeatGeek, representing nearly $18 billion of dumped deal value.
Why it matters: CEOs, boards, SPAC sponsors and private market investors all made a fundamental miscalculation in the benefits of going public via SPAC. READ MORE
A top global VC’s important lessons on securing venture capital
Raising capital is a massive challenge for any startup. It’s not just the who, what and where – it’s the how.
There are generally two types of capital available to a startup or scaleup: debt and equity. Debt capital is the kind you’re used to: you borrow money from a lender and pay it back with interest. Equity capital, on the other hand, means you sell company shares in exchange for funding. READ MORE
4 lessons I learned in my journey from VC to CEO
Someone could be an expert in designing and building pools, but that doesn’t make them a great swimmer.
That was the first lesson I learned when I made a big career switch from VC to CEO. After several years at the top Bay Area venture capital firms, I had decided to go to the other side and become cofounder and chief executive of a cybersecurity company. READ MORE
The Science Of Startup Valuation
“It’s more of an art than a science.”
You’ve probably heard this phrase most often in relation to cooking, from a friend or relative explaining their mixed results with a particular recipe. The implication is that precision and calculation is less important than feel and intuition. READ MORE
May Funding Falls Again, But Not At Every Stage
Global venture funding in May 2022 reached $39 billion, Crunchbase data shows, marking the first month in more than a year when it dropped below $40 billion. The May figure is also well below the $70 billion peak VC funding reached in November 2021.
But while late-stage and technology-growth investing have been most severely impacted, seed funding remains surprisingly robust. READ MORE