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Collapsed crypto exchange FTX used $200 million of customer funds to make two venture capital investments, according to a Securities and Exchange Commission complaint.
Two separate investments of $100 million each were made via FTX Ventures and "were funded with FTX customer funds that had been diverted to Alameda," the filing said. READ MORE
Venture firm Tribe Capital wrote to a select group of its co-investors earlier this month with some bad news.
Tribe was slashing its internal valuation of Canadian-British startup Invenia, on which it had bet $30 million, by 95%. Invenia co-founder and Chief Executive Officer Matthew Hudson had been “terminated” and a board-led investigation found he’d “secretly, systemically and repeatedly inflated the revenue and profitability of the company,” according to the memo, which was sent by Invenia board member and Tribe CEO Arjun Sethi. READ MORE
For what’s seemed like forever in venture capital, startups and investors have sought an edge by associating themselves with the hot space of the moment.
When Uber was ascendant in the early 2010s, startups habitually touted themselves as “the next Uber” of their field. When e-commerce aggregators were hot last year, it seemed like everyone was doing it. Same holds for autonomous trucking, 3-D printing, “buy now, pay later,” i-buyers. … Wherever you saw a hot trend, you’d find a cluster of well-funded startups. READ MORE
Venture capital investments into agritech and foodtech start-ups plunged in 2022 amid rising interest rates and questions over the start-ups’ business models, raising the prospect for industry consolidation and increased M&A in the year ahead. Companies in the two sectors raised just under $30bn in 2022, down 44 per cent from a year before, according to preliminary analysis from corporate data group PitchBook. READ MORE
Many companies succeed based on their ability to address an unmet need or tap into a new opportunity. This is the case for Alumni Ventures, a venture capital firm with over 8,000 investors and $1 billion in capital raised, that has quickly grown to be one of the most active venture investors in the world and America's largest venture capital fund for individual investors. READ MORE
Venture firms have continued to raise record funds in 2022, even as startups received far less money than they did last year. That poses the question: What will happen with all that dry powder in 2023?
Dry powder is as high as $1.3 trillion globally for private equity and $580 billion globally for VC, according to one estimate from James Ephrati of Lightspeed Venture Partners. The dry powder in 2021 was roughly the same, he said, but investors were putting money to work at a record pace. READ MORE
For startups in times like these, Series A is a good place to be.
At this stage, a company is established, with a solid track record, yet young enough so its biggest growth is still ahead. That’s a sweet spot for venture investors, with startups raising a Series A round this year generally enjoying more success than later-stage companies. READ MORE
CFOs considering an IPO confront warnings of recession and the prospect that a whipsaw in equity prices will persist. The Cboe VIX Index — a gauge of expected volatility in the Standard & Poor’s 500 index — has gyrated this year, surging 33% as of Tuesday. READ MORE
With the S&P 500 down approximately 20 percent year to date, virtually every investor is feeling the pain of unrealized losses. Unfortunately for most investors, bonds have not provided the ballast for portfolios that they typically do. Interest rates have risen 300 basis points or so in 2022, leaving core bond portfolios down roughly 20 percent as well.
There has been nowhere to hide. Well, except maybe private markets. READ MORE
The U.S. venture capital (VC) deals are slowing in the face of ongoing economic headwinds, according to the Q3 2022 PitchBook-NVCA Venture Monitor.
The quarterly report, produced by PitchBook and the National Venture Capital Association (NVCA), said deal counts fell across all stages in the third quarter. Deal counts dropped for the second consecutive quarter after reaching a record high in the first quarter of 2022. Further, the
total money invested reached a nine-quarter low this past quarter. This pullback was especially pronounced at the late stage, where nontraditional investors – the largest drivers of mega deals and the overall growth seen at the top of the market – slowed investment in VC-backed startups. READ MORE
As a startup founder, you are facing a global recession, a correction of the stock market, a corresponding correction of startup valuations, and venture capital investors who have slowed down and sometimes even stopped their investment activities. And while the VC industry is sitting on a record level of dry powder, you would be foolish to believe that the $290 billions of dry powder available (in the US alone) will be flooding the market as if there had never been a crisis. There are several reasons why venture capital investors won't just return to their pre-crisis funding behavior. READ MORE
The cover of Fortune, an invite to speak at TED and a front-page feature in the Wall Street Journal are all examples of what not to expect when your venture-backed startup raises a round of capital. I wanted to put that up front. So many venture-backed founders we talk with and represent have outlandish expectations and dreams about announcing a round of funding. READ MORE
In the days of yore, $214m would have been a decent-sized venture capital fund.
US VC heavyweight Andreessen Horowitz’s first fund in 2009 was $300m, the first three Founders Fund vehicles by Peter Thiel oscillated between $200m and $250m, and even as recently as Q3 2022, the median US fund size was still barely $50m. READ MORE
Venture capital is a fascinating indicator to watch in an increasingly murky economic picture. Economic downturns go hand in hand with innovation, particularly in the tech sector. Talented employees lose their jobs and collaborate on projects that otherwise never would have happened, backed by investors looking for rare growth opportunities. READ MORE
If you’ve read anything about pitching your company, you’ve probably come across advice that says that you need a warm introduction to an investor. Without a doubt, a good, friendly introduction — ideally from a founder they’ve already invested in — is the best way to get on the radar of an investor. But if you don’t regularly attend barbecues at the Sonoma mansions of venture capitalists, don’t worry — access isn’t the only way to raise money. READ MORE
Over the last several years, VC money has been abundant and relatively cheap. This created an environment where everyone’s motto became, “growth at all costs.” Seemingly, the recipe for a successful venture-backed company became very cookie-cutter: Raise capital every 18 months; invest heavily in go-to-market; grow revenue at a ‘standard’ rate that triples in year 1, triples again in year 2, and then doubles thereafter. READ MORE
For anyone looking to evaporate a large pile of money, the past year has presented abundant options. Of those, one of the faster and more effective methods involved investing in tech companies going public via SPAC. READ MORE
There has been a lot of talk about down rounds and dropping valuations for startups since about the second quarter of this year, but examples of such picked up this week as startups looked to add cash before the end of the year at slashed prices. READ MORE
Political turmoil, Covid-19, conflict in Europe, energy crisis, supply chain disruption, cost of living, inflation, interest rates: the backcloth to turbulent times in dealmaking. Buyer caution stands in contrast to high valuation expectations softening normal activity across geographies. Hardly a positive outlook then? Acknowledging the challenges economies face, there is another view. PE and other private asset managers have the firepower, drive and agility to unlock value despite the turmoil. READ MORE
It all started with an offhand remark from a CIO at a run-of-the-mill investment conference.
Speaking on a panel before an audience of institutional investors in New York, Rockefeller University investment chief Paula Volent noted that two of the endowment’s private investment managers held pieces of the same portfolio company — and that those managers had assigned that company completely different valuations. READ MORE