6 Steps to Self-Fund Your Startup

It doesn't matter if you invest $100 or $100,000 into your own business. It doesn't matter if your net worth is in the millions or pocket change. If you self-fund what turns out to be a money pit, you're going to eventually put an equally painful dent in your future.

I've self-funded three startups to success - and by "success," I just mean the opposite of failure, and there were a lot more failures. My first self-funded startup ran profitably for 12 years. The second was acquired relatively quickly. The third, Teaching Startup, has been running for almost three years now on sustainable margins.  READ MORE

2023 will bring crisper methods for evaluating startup success

The momentum of the most active 12 months ever for venture investing did not carry over well into 2022, to say the least. As interest rates and inflation spiked, geopolitical challenges arose and the economy began trending downward, fundraising slowed dramatically throughout the year.

But if 2022 was a year of paradigm-shifting dynamics, 2023 will be a year when we’ll determine the winners and the losers — and more importantly, when crisper methods for evaluating success will emerge. READ MORE

Why Does Private Equity Get to Play Make-Believe With Prices?

If you wanted to come up with the one-liner about investing most likely to make my head explode, you might try, “The way to choose investments is to just jump on whatever’s done the best over the past three to five years.” Or, getting more creative: “Hey, did you know Cathie Wood is still getting inflows?” Yet more creative: “The war in Ukraine was caused by stock buybacks.” But you couldn’t do much better than “Interim valuations don’t really matter,” as Christopher Schelling says in reference to private equity investing. If exploding my cranium was the goal, then well played, sir. Otherwise, oh, hell no. READ MORE

How companies can successfully navigate the VC investment process

Securing investment from VCs can be disruptive and slow – but there are things that can be done to ease the process

Most successful founders will tell you that getting venture capital (VC) to invest in your business is often the start of a long and disruptive process. Having a fundraising plan and getting your house in order helps minimize disruption to your business, avoids wasting time and makes the process as straightforward as possible. READ MORE

Litigation Finance Drives Profits For Private Equity And Venture Capital Firms And Their Lawyers

Lawyers representing private equity and venture capital portfolio firms understand that their clients routinely face important business decisions about whether to initiate meritorious litigation claims that could result in substantial recoveries.

Yet convincing their clients to move forward with litigation—no matter how lucrative it may ultimately be—is another matter entirely. The main culprit for this hesitancy is a simple one: PE and VC firms are loath to saddle their portfolio companies with the expense of litigation when that precious capital could be used to enhance a company’s operations or develop new products. READ MORE

The legal threat coming for venture capital

After being battered by rising interest rates and choppy markets, the venture capital industry is sweating new regulations that could expose fund managers to legal risks.

The SEC is putting the final touches on a rule that would make it easier for investors to sue VCs for bad behavior, negligence or recklessness. It would “open up all types of litigation risk to being a venture capitalist,” Justin Field, the National Venture Capital Association’s senior vice president of government affairs, told MM. READ MORE

Corporate Venture Capital: 4 Strategic Rationales To Understand

2022 will be remembered as the year that the tide turned on a historic era of easy money, and 2023 is looking like it will bring even greater challenges. Yet no matter how difficult the backdrop, there are still plenty of businesses that will need to raise venture capital. Especially in these tough market conditions, it is crucial for leaders to broaden their understanding of capital markets and multiple types of investors as they search for new sources of funding. READ MORE

Most Active Startup Investors Hit The Brakes In 2022

For multiple years, the most active startup investors kept upping their games. They did more deals, backed larger rounds, and kept pushing up valuations. 

In 2022, they took a breather. Per Crunchbase, virtually all of the most prolific venture and seed investors did fewer deals last year than the year before. The value of rounds they led shrunk too, with particularly steep declines for SoftBank Vision Fund and Tiger Global Management, which pulled back in the wake of heavy losses in their existing portfolios. READ MORE

Private equity's share of terminated M&A deals ticks up in Q4

Private equity's share of terminated M&A deals was on track to grow again in the fourth quarter after declining over the previous three-month period, according to S&P Global Market Intelligence data.

Through Dec. 15, private equity or venture capital had a hand in three out of the 30 deals canceled globally in the fourth quarter, or 10% of all terminated deals. If that rate holds through the end of the year, it will nearly double their 5.1% share of M&A deals called off in the third quarter. READ MORE

Investors Widely Prefer Small Private Equity And Hedge Funds

At a time when investors and fund managers have struggled to find returns, some corners of the alternative asset space have held up better than other areas of the markets, like public equities. As a result, it should be no surprise that institutional investors are planning to boost their allocations to alternative assets.

However, one interesting finding from a recent survey is that smaller hedge funds and private equity funds with less than $250 million in assets under management are in demand. READ MORE

Private equity dominated the top 10 enterprise M&A deals in 2022

It was a funny year in enterprise tech M&A, one in which the majority of activity came from private equity firms: As tech stock values plunged throughout the year, these companies went bargain hunting. They saw companies with lots of upside being vastly undervalued in the brutal market conditions of 2022.

But curiously, the year began with Microsoft announcing it was acquiring Activision Blizzard for a startling $69 billion in January, followed in April by Twitter being sold to Elon Musk for $44 billion. Neither of those deals made this list, however — they aren’t really enterprise companies. But they did show the promise and big money being tossed around this year. READ MORE

The Kroger-Albertsons Merger Spotlights a Popular Private Equity Tactic

Cerberus Capital Management, a big private equity firm, has long attracted controversy. In 2007, it took over Chrysler, but after two years of Cerberus ownership, the company needed a government bailout to stay in business. It spent years buying up companies that made guns — one of which was used by Adam Lanza in 2012 to kill 20 children and six teachers at Sandy Hook Elementary School in Newtown, Conn. READ MORE

Private Equity Managers May Face Increasing Headwinds In 2023

Multiple studies have shown over the years that private equity has become increasingly popular among investors, and it's easy to see why. Not only does private equity (PE) increase diversification within a portfolio, but the asset class' returns have generally outperformed the public markets.

Looking into 2023, private equity could see increasing headwinds, but opportunities to generate alpha are expected to remain in place. READ MORE

VC firms are getting stingier with startups

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 2023, Novelty Is In, Copycats Are Out

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