Funding your business without venture capital

Raising money, whether through venture capital, seed funding, or angel investment, is taken by many founders to be the default route for growing their companies, but it is certainly not the only path to scaling your business.

Entering into an agreement with external investors is not something to be taken lightly, especially combined with the pressures of launching and growing a new start-up. While raising money through venture capital may seem like the obvious solution to cash-flow woes in the early stages of your launch, it can often raise problems further down the line. READ MORE

Four Documents That Venture Capitalists Want To See

In a recent article, I explained the basics of venture capital and how you could conceivably fund your organization. In this article, I will explain some key points you should consider before you even attempt to contact a venture capital company.

Too many people representing too many companies go to these powerful, influential groups expecting a big payday, enough funds to expand their business or seed funding for a startup. They don’t realize they’re not prepared and how that lack of preparation will more than likely end the meeting with a “thanks, but no thanks” response from venture capitalists. READ MORE

Delisting Looms For These Poorly Performing SPACs

When shares of a company that went public via a SPAC merger are down around $1 or $2, things are already not good.

That’s because the overwhelming majority of blank-check acquisition companies debut at $10 per share. When they find a company to buy and take public, anything under that threshold is a negative return. READ MORE

Startups Providing Abortion Access Could Seek More Funding In Wake Of Roe Decision

The U.S. Supreme Court overturned Roe v. Wade on Friday, ending decades of Americans’ constitutional right to abortion access.

Now, it will be up to individual states to make decisions regarding abortion restrictions, with at least 13 states banning or severely restricting it immediately, according to The Washington Post. READ MORE

Cybersecurity Startup M&A Holds Steady After Record Year

While not on the same breakneck pace of last year, M&A dealmaking involving cybersecurity startups has remained robust in 2022, even with a sputtering economy.

Last year was a record breaker for cybersecurity dealmaking, with 124 VC-backed startups getting bought, according to Crunchbase data. Although it doesn’t seem that 2022 will break that record—with only 49 announced through nearly half the year—this year is still clocking in at a healthy pace, according to those who observe the market. READ MORE

Subpoenas issued to directors of SPAC taking Trump's social network public

A federal grand jury in New York has issued subpoenas to each board director of the blank check company that has agreed to take Donald Trump's social media startup, Truth Social, public.

Why it matters: This is in addition to previously disclosed investigations into the blank-check company by both the SEC and Justice Department, thus intensifying questions about Truth Social's financial future. READ MORE

FTC Settlement Highlights More Aggressive Enforcement of Private Equity Acquisitions

The U.S. Federal Trade Commission (FTC) voted 5-0 to issue a complaint and accept a proposed order for public comment regarding private equity fund JAB Consumer Partners SCA SICAR’s (JAB) $1.1 billion acquisition of SAGE Veterinary Partners, LLC (SAGE) on June 13, 2022. Despite a unanimous, bipartisan vote to resolve a handful of competitive overlaps, public statements from the FTC’s three Democrats and two Republicans highlight a significant schism regarding enforcement of private equity acquisitions and prior notice and approval requirements for future transactions. READ MORE

An early look at 2022 VC fund returns

A suddenly sour macro environment took its first victim in unprofitable growth stocks.

Next came broader indices falling into bear market territory along with a flight from fixed income markets.

Now, LPs' VC portfolios may be the next target of persistent inflation, rising interest rates, and slowing economic growth. READ MORE

Banks ramp up bridge funding to PE, VC funds

As banks lose market share in traditional commercial lending, some are seizing the growing opportunity of providing short-term financing to private equity and venture capital funds, says Moody’s Investors Service.

With banks losing ground to private credit suppliers in traditional lending, they are increasingly finding business in capital call lending — which are effectively investment bridge loans for PE and VC funds, Moody’s said in a new report. READ MORE

The Three Traits Of Highly Effective VCs

Venture capital (VC) investing, done well, requires the right amount of capital and the right amount of industry expertise invested in a startup at the right time. At its best, venture capital delivers a clear advantage to a startup that propels it through its critical growth stages and continues to add value throughout the company’s lifecycle. READ MORE

VCs shouldn’t confuse risk management with not funding diverse founders

The news that funding for Black founders is falling was no shock to the Black community, much of which was raised with the aphorism, “when white America catches a cold, Black America gets pneumonia.” READ MORE

The startup giving ex-employees cash to start companies

Most companies don’t give ex-employees cash to leave and start their next business. They’re more often willing to spend to pay and retain them, even launching fancy “intrapreneurship” programs to keep startup ideas in-house.

Nylas CEO Gleb Polyakov takes the opposite approach. If his employees want to be entrepreneurs, then they should “graduate” from the company and go build their passion, Polyakov told me. In fact, Nylas will give any ex-employee starting a new company at least $20,000 to pursue it as part of its new Nylas Alumni Fund. READ MORE

Private equity’s short-termism has a rising cost

Private equity dealmaking is getting a little too incestuous. Volatile markets and the $3 trillion industry’s sheer size mean that Blackstone (BX.N), KKR (KKR.N) and others will increasingly have to sell assets to each other - and even themselves. The merry-go-round can create governance concerns and extra costs. READ MORE

What does the ESG reckoning mean for VC?

“If I had to choose between switching to renewable energy or keeping staff on, I’d definitely put aside that energy transition,” Micol Chiesa, formerly head of impact at Five Seasons Ventures told me this week. “And that’s a fair choice,” she added. 

Her comments sum up the current reckoning that ESG is facing perfectly. The acronym arrived in the mid-2000s to describe how investing could bear more than just profit in mind — you could invest and do good.  READ MORE

Even A16z Is Slowing Its Investing Pace

Andreessen Horowitz is one of the most-recognized venture capital firms in Silicon Valley and it just keeps growing. But amid a broader pullback in venture investment, the firm also appears to be slowing down its investing pace this quarter, at least compared to where it was last year. READ MORE

Bootstrapping Versus Venture Capital: Figuring Out What Works For You

Whether to go with venture capital or bootstrapping is a question most SaaS founders face at various stages of their business—anywhere from initial product development to accelerating growth for multiple products. READ MORE

Forget the Slowdown Chatter, VCs Are Still Spending Like Drunken Sailors

The S&P 500 is in the gutter. The tech-heavy NASDAQ is doing worse. IPOs are struggling to clear their listing prices and some tech stocks—like Uber—are trading well below their private market valuations.

Yet venture capitalists are continuing to throw money at tech startups, and 2022 is shaping up to be the second most active year of VC funding on record, right behind 2021. The public market slowdown—which limits the returns these VCs can hope for—isn’t meaningfully stalling their activity, ​​contrary to the popular narrative. READ MORE

Private equity in health care: in the Antitrust crosshairs

On 13 June 2022, the FTC announced a proposed consent agreement in connection with JAB Consumer Partners SCA SICAR’s (“JABCP’s”) proposed $1.1 billion acquisition of SAGE Veterinary Partners, LLC (“SAGE”). 1 JABCP is a private equity firm that owns Compassion-First Pet Hospital and National Veterinary Associates, Inc. (together, “Compassion-First/NVA”). READ MORE

Why private equity can lead on sustainability

A new HBR paper, “Private Equity Should Take the Lead in Sustainability” by Robert Eccles, Vinay Shandal, David Young and Benedicte Montgomery argues how – and why – the private equity must lead on integrating sustainability. READ MORE

LPs Are Turning Down Alternatives Managers Over ESG Concerns

If alternative managers don’t embrace ESG, they may risk losing business.

A quarter of limited partners surveyed by Preqin said they have turned down an investment opportunity due to concerns over ESG standards, according to the research firm’s latest report on environmental, social, and governance investing, expected to be released Thursday. Another 39 percent of limited partners said they are prepared to do the same if necessary. READ MORE