Much has been written about the implications of FTX’s collapse for the future of cryptocurrency and the broader financial system. Commentators have not focused much on what the debacle may be saying about the state of venture capital investing. Maybe they should. READ MORE
Why this Recession is Actually a Gold Mine for Venture Capital
Tech has been arguably overdue for a correction of sorts, not unlike high finance during the 2008 Great Recession. And VCs have tightened their belts in anticipation of the impending downturn mixed with high inflation. This has culminated in investors focusing on quality versus quantity in terms of startup deals. Cheap capital won’t be as plentiful as they were nearly a year ago. According to PitchBook, the squeeze on venture capital has quickly translated to a more investor-friendly environment as entrepreneurs compete for a smaller aggregate pool of funds. Commensurately, the median valuation step ups have dramatically begun to revert to the mean of the past five years as well. READ MORE
Venture capital risks missing the high-tech industrial wave
The battle to dominate industrial technology is ramping up, as government intervention in economies becomes far more prevalent. Investors— once enamoured of asset-light firms and high returns—had better be prepared to put in billions of dollars towards this, or risk being crowded out. READ MORE
Despite tough market, female founders prove resilient in venture capital landscape
Nearly a decade ago, venture capital funds with a gender-diversity strategy were hard to find in the vast heartland of the U.S. between the coasts.
Austin-based True Wealth Ventures set out to remedy that. It searches for financially outperforming startups led by women that aim to improve environmental or human health. READ MORE
Why VCs Explaining “It Was Only 4% Of Our Fund” Is Misleading Minimization When a High Flying Startup Implodes
As more high-flyer private companies find their shine tarnished, investors (or adjacent VC-explainers) remind us that it’s unfortunate but actually a non-issue, so please, let’s move on and not rubberneck the pileup. Wait, what? Losing tens of millions of dollars (or more) is no big deal? Don’t people get fired for that? READ MORE
Why It’s A Good Idea To Invest In a Second- Or Third-Time Founder
The best VCs identify and support the world’s best founders. This is at the core of what they do.
Creating and growing a startup to scale is an extremely difficult task that can be derailed by a myriad of circumstances outside of a founder’s control. So even when great founders fail, the best VCs are waiting in the wings to support their next idea. READ MORE
Another Report Indicates that Global Venture Capital, Private Equity Deals Have Declined Versus Year Prior
The reports keep rolling in, highlighting a slowing environment for private firms. Venture capital, along with private equity activity, has been in decline for some time now – a fact that should come as no surprise to anyone. Giga high inflation and the inevitable reaction by central banks attempting to crush rising prices means money has become much more expensive. Economies around the world have slowed with geopolitical strife, like the war in Ukraine not helping the situation. READ MORE
VCs and founders agree: Both should be in it for the long haul
For company founders and the venture capitalists who back their businesses, long-term alignment is crucial, a panel of VCs and entrepreneurs stressed at a Fortune conference on Tuesday. The group also shared what they’ve learned from the recent spate of layoffs at startups. READ MORE
U.S. Venture Capital Raised Falls 30% in Q3
A third-quarter downturn in venture capital (VC) dollars raised in the United States, particularly in later-stage deals and from nontraditional investors like asset managers, is the first evidence of distress in the VC ecosystem. READ MORE
We Can't Rely on Venture Capital Funding to Build a Just and Thriving Entrepreneurial Economy. Here's What to Do Instead
The venture capital (VC) funding model is often portrayed as the new version of the American Dream — a plucky start-up founder invents a disruptive new technology, catches the eye of venture capitalists, sells the company for hundreds of millions, and spends the rest of their days sailing the Mediterranean. It's a nice story for the .01% of business owners who can — or want to — achieve that outcome. READ MORE
VC funds bid era of double-digit returns goodbye
The yearslong era of venture capital outperforming other private market asset classes is likely coming to an end.
An abundance of near-free capital and a robust IPO market allowed venture capital funds to post double-digit percentage returns in nearly every quarter from Q4 2017 through Q1 2022, according to PitchBook's 2022 Global Fund Performance Report. But by this year's second quarter, the venture funds' internal rate of return turned negative. READ MORE
Venture capital investors see an ‘R’ word coming for tech — and it isn’t just recession
Tech-startup investors expect a big 'reset' that creates 'a two-year period of both pain and opportunity,' with money still flowing to early-stage startups while older ventures face an uneasy road. READ MORE
Valuations on Early Stage Companies Are Holding Up — But Will It Last?
Even as the valuations of late-stage, venture-backed companies continue to tumble amid rising interest rates and fears of recession, seed and early-stage start-ups appear to be holding their own. READ MORE
Founders should consider VC firms their allies as they build in the bear market
This year’s bear market trajectory should be looked upon as a favorable opportunity for Web3 founders to raise capital and build cutting-edge products. Some of the most robust businesses today were built during market downturns, and founders now have a real opportunity to ensure they’re building products and services that meet genuine, real-world needs and look beyond oversized checks to find the most suitable business partnership. READ MORE
Late-stage Funding Decline Leads VC Pullback In October
Global venture funding reached $27 billion in October 2022, remaining flat month over month and down more than 50% year over year.
Each funding stage declined at different rates year over year for this past month. Late-stage funding dipped the most, by more than 60% year over year. Early stage declined by around 40% and seed by 20%. READ MORE
Opportunities in Private Equity
Marcus New, CEO and Founder of InvestX, shares how the bear market is impacting private equity, and why he sees the next six to 12 months as a “compelling time” to make money in private equity. Marcus also talks about the biggest trends he is seeing in the space. READ MORE
Venture Capital and Private Equity Continue to Have a Taste for HR and HCM Tech Opportunities
The Surprise: While recession risks have led VCs to press pause on many pandemic favorites, the Human Capital Management (HCM) niche has proven to be the exception.
It is a crowded space - over 400 HCM companies set up shop at the 2022 HR Technology Conference in Las Vegas. There's a reason for all the competition. The need for a scientific approach to managing a company's workforce gained steam during the COVID-19 pandemic, leading HR Tech to receive a record amount of VC attention in 2021. Despite all the hype over the past two years, this trend shows signs of staying power. The global HR Tech space is projected to expand at a CAGR of 9.1% through 2029 to $46.85B, which dwarfs the current size of $25.53B. READ MORE
Do You Need A Co-Founder To Raise Venture Capital?
If you have ever thought about founding a company, odds are that you have also thought about having a co-founder.
It could be because some of the most well-known companies had co-founders (e.g., Facebook, Google, Microsoft, Apple). In fact, one report found that 80% of billion-dollar startups had multiple founders. READ MORE
After A Lot Of Hype, (Useful) AI May Finally Be Here
Artificial intelligence has once again become a hot buzzword in tech, even somewhat knocking off the malaise the venture capital markets have been under in the last several quarters.
However, this time around it may have real staying power as advancements in generative AI seem to be riding a wave of excitement some have compared to what cloud computing saw nearly two decades ago. READ MORE
The Case For Not Paying Attention To Elon Musk
So, I don’t hate Elon Musk. In myriad ways, he’s a genius engineer, entrepreneur and marketer. Tesla is a legit EV leader. SpaceX is a transformative company. And Elon himself, for better or worse, is certainly a colorful public figure.
But nonetheless, I am sick of hearing about and from Elon Musk. READ MORE