Record inflation, rising interest rates and a significant slowdown in M&A activity are creating new challenges for private equity managers and asset owners, according to a new report from Boston-based management consultancy Bain & Co. READ MORE
What do Gen Z founders really want from VCs?
Members of Gen Z — those born after 1996, generally — are self-aware, persistent and innovative; they’re digital natives, care deeply about their own wellbeing and that of the planet; and they’re more culturally diverse and socioeconomically vulnerable than older generations.
But how does that affect Gen Z founders’ relationship with VCs? READ MORE
Looking for an investment from a CVC? Take these 3 tips to the negotiation table
As venture capital flows continue to fluctuate, founders have to double down on the terms they agree on. While it can be tempting to overlook certain terms for the sake of closing a deal, founders should remember that nearly everything in a deal is negotiable. READ MORE
Slowdown? What slowdown? Menlo Ventures bags $761M for its largest-ever opportunities fund
Startup founders and laid-off tech workers know all too well about the funding slowdown of 2022, but the boom times aren’t over for everyone. U.S. venture firms in particular are amassing more cash than ever, and Menlo Ventures is perpetuating the trend.
The 46-year-old Bay Area firm, known for its early bets on companies like Uber and Warby Parker, told regulators this week that it has secured $761.4 million for its third “special opportunities” fund. It appears to be Menlo’s largest such fund to date. READ MORE
The Startup and Venture-Capital Barometer Plunges
Silicon Valley Bank, under the holding company name of SVB Financial Group, is the 13th largest bank in the US, with $214 billion in assets. It is heavily involved in the ecosystem of startups, venture capital firms, and private equity firms in Silicon Valley and other cities in the US, and globally. READ MORE
Private debt markets: from dinosaur to dynamic funding model
The private debt markets were once regarded as the dinosaur of the financing world: bank driven, completely immune from world events, and one of the only industries still using fax machines well into the 21st century. But things have changed. As banks have retreated from large parts of the corporate lending space, private markets have proven to be an increasingly attractive and mature funding source for sponsors, especially in times of volatility. READ MORE
Corporate VC, at its Best a 'Beneficial Virus,' Booms as Source of Innovation
The premise behind corporate venture capital is simple: Setting up a dedicated vehicle for investing in startups is putting your innovation money where your mouth is. It takes a different path on exploring next-generation products and new commercial opportunities (and threats) and supplements traditional research and development work with a dash of the excitement and promise that comes with startups. READ MORE
Buyers wanted: Exit opportunities for venture-backed startups sharply decline amid downturn
It’s getting harder for an early-stage company to find a buyer.
The exit value for U.S. venture capital-backed startups in the second quarter was the lowest it’s been in more than five years, according to a report released Wednesday by PitchBook. READ MORE
Despite economic issues, venture capital activity remains strong
Venture capital activity in the first half of 2022 has remained strong despite ongoing economic issues, according to the latest quarterly report released early Thursday by PitchBook-NVCA Venture Monitor.
Reflecting numbers reported in its first look report last week, PitchBook-NVCA noted that while the number of deals continued to thrive, the value of deals has dropped. The megadeals that defined 2021 were also found to have slowed in the first half of 2022 as investors took a more cautious approach. READ MORE
US venture capitalists have never had so much spare cash
You might think given the chatter in the startup world that venture capitalists are short on funds — after all, we’re hearing about young tech companies finding themselves marooned between stages, hitting up investors with smaller capital pools than prior backers and turning to equity crowdfunding to keep their cash balances healthy. READ MORE
FTC Consent Decrees Underscore Skepticism and Scrutiny of Private Equity Firms
Twice in the past month, the Federal Trade Commission unanimously announced consent decrees that allow recent private equity-sponsored deals to close with some divestitures but also impose prior notice requirements for future acquisitions that are unprecedented in their breadth. The announcements, which come a month after the confirmation of a fifth commissioner gave the Democrats a 3-2 majority on the FTC, are a strong signal of the current Commission’s intent to investigate private equity transactions aggressively. READ MORE
Venture capital funding may have slowed, but VC firms have no problems raising new funds
As the market swoons, venture capital firms continue to announce new funds.
TechCrunch reporters covered five of these more in-depth Tuesday, as you will see below.
Meanwhile, I corresponded with three firms about their funds and any concerns that limited partners had brought up during the fundraising stage. READ MORE
Bill Ackman to close largest SPAC ever, return billions to investors
Two years after forming the largest special purpose acquisition company (SPAC) ever, billionaire hedge fund manager Bill Ackman is shutting it down.
Ackman's Pershing Square Tontine Holdings raised $4 billion in its initial public offering in July 2020, but the activist investor told shareholders this week he would be returning those funds after failing to find a suitable target company to merge with. READ MORE
Why It’s Time To Invest In Early-Stage VC
Warren Buffet often says to “buy when there’s blood in the streets and sell when there’s euphoria” and that moniker is as true today as it has ever been.
We are witnessing a global correction in equity prices, driven by macroeconomic factors like inflation and geopolitical instability as well as microeconomic factors like the recent (and dramatic) declines in cryptocurrency prices. READ MORE
To mark down or not: That's the question VCs face as market slump persists
If you're wondering just how much valuations of private companies could drop amid the downturn and rising interest rates, look no further than Klarna.
Last summer, the Swedish buy now, pay later lender was valued at $45.6 billion. But the winds have shifted dramatically since then. The most valuable private company in Europe is reportedly raising a new round of financing at a valuation of $6.5 billion—a drop of more than 85%. READ MORE
Drop in funding is a warning to startups
For the first time in three years, startup funding is dropping.
The numbers are stark. Investments in US tech startups plunged 23 percent over the past three months, to $62.3 billion, the steepest fall since 2019, according to figures released Thursday by PitchBook, which tracks young companies. Even worse, in the first six months of the year, startup sales and initial public offerings — the primary ways these companies return cash to investors — plummeted 88 percent, to $49 billion, from a year ago. READ MORE
Billionaires Can’t Get Enough of Private Equity
After a record fundraising year, there are worries that private equity’s golden era is over.
Banks’ souring sentiment toward buyout loans and a drought in initial public offerings are pressuring both ends of private equity’s deal machine: the buying and selling of companies. READ MORE
How to Raise First Dollars in a Difficult Market
Raising venture capital is rarely an easy lift for startups, but 2022 is turning out to be a more challenging year than we’ve seen for some time. As venture capital continues its slowdown after an aggressive 2020 and record-breaking 2021, it’s clear that early-stage founders looking for their first dollars will require a new approach. READ MORE
Bitcoin Retaining Its Appeal Among Venture Capital Firms
The latest crypto sell-off may have shaved off a considerable number of retail investors, but institutional investors still have curiosity in the long-term potential of the crypto market. Venture capital firms, in particular, are harboring more interest in the leading cryptocurrency, bitcoin. READ MORE
Q2 2022 Venture Capital Funding Data Shows a Steep Drop, But Still Exceeds Pre-Pandemic Levels
CB Insights has released the preview of their State of Venture Q2’22 Report, finding a 23% drop in venture capital funding to startups on a global level in the second quarter of this year, with $108.5B raised across 7,651 deals. They note this was the second largest quarterly percentage drop as well as the largest quarterly percentage drop in deals in the past ten years. READ MORE