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Apologies to my many VC friends. I don’t mean to insult or disparage you in any way. You’re all not only brilliant, creative, and successful individuals, but caring and generous people (well, most of you.)
The reason venture funds chase after startups in the same few trendy sectors is not a problem with the individuals. It’s a function of the way the VC system works. Despite all the talk about innovation and disruption, the venture capital system encourages industry-wide groupthink. READ MORE
A couple years ago, when startups were raising record sums and using it to lose money, there were those in the nonstartup founder community who tut-tutted about why it seemed like a bad idea.
“Slow down” was the common mental refrain. If you sell your products at a loss, how will you ever turn a profit? What if investors no longer want to fund growth at any cost? Is it really wise for a company this deeply in the red to spend on perks like in-house manicures and dog walking? READ MORE
Would it be better to be a chief executive who is accountable to Steve Schwarzman instead of Nelson Peltz? Schwarzman is the founder of the private equity juggernaut Blackstone which has made its name taking companies private in leveraged buyouts. Peltz’s Trian Partners, on the other hand, is known for activist campaigns at public companies. Most recently, Peltz pushed for change at Disney where CEO Bob Iger is now slashing 7,000 jobs among $5.5bn in annual cost cuts. READ MORE
Fundraising by venture capital firms hit a nine-year low in the fourth quarter, as the macroeconomic pressures that already weighed on technology startups began to affect the investors who underpin the industry. READ MORE
Many tech workers have never experienced a job market like this one.
Last year, 1,044 tech companies let go of 159,786 employees, according to Layoffs.fyi. As of this writing, 103,767 workers have been laid off from 345 startups so far in 2023. Many, many more are coming, obviously.
Losing a job unexpectedly is more than a financial shock. Many of us invest much of our identity in what we do for a living, which means layoffs can transform social and emotional lives overnight. READ MORE
Investors in the private markets face a range of uncertainties this year, from a possible recession to the prospect of more interest rate hikes by the Federal Reserve. READ MORE
Cashed up private equity investors are rolling up their sleeves and preparing to butt heads with target boards as they push to get deals done in a challenging valuation environment.
That’s according to Allens partner Kounny Rattley who reckons deal-hungry private equity firms have adopted a ‘take no prisoners’ approach and 2023 will see all options on the table. READ MORE
When companies are just getting off the ground, there are many stressors and opportunities. This is an exciting time in the life of your company, and there are some common pitfalls that you can avoid. READ MORE
After years of explosive growth, much of the tech world is notably less frothy than it was — which may mean a return to some more sustainable business practices. On the latest Pivot podcast, Kara Swisher and Scott Galloway discuss the current state of venture capital and the benefits of higher interest rates. READ MORE
Managing burn rate is a critical aspect of running a startup, especially in a recession or protracted economic downturn. The market has shifted and so have investors’ expectations. It’s no longer a game of growth at all costs — sustainability, profitability and efficiency are the new key performance indicators catching the eyes of investors. READ MORE
If you spend time online, then invariably much of it goes toward consuming lies and half-truths. Even if you are good at filtering these things out, it’s likely others in your circle are not.
As we well know, misinformation has consequences. Hard-earned money evaporates in get-rich-quick scams. Patients reject proven therapies in favor of quack cures. And targets of false smears contend with long-term reputational damage. READ MORE
Disappointing private equity returns in 2022, and the lag in reporting those returns, may represent a threat not just to investors, but to pension plans’ ability to pay retirees in 2023. More specifically, private equity returns are typically reported with a lag of up to six months. This means that the degree to which pension plans are currently funded (or more correctly, underfunded) likely does not reflect potentially large losses incurred in the difficult second half of 2022.
This issue is especially important because private equity comprises about 11% of the assets of public pension portfolios, per a 2022 study by the American Investment Council, which analyzed 176 public pension funds representing more than 30 million public sector workers and retirees. READ MORE
Startups usually run at a deficit while designing and building the product. But companies are designed to make money, and over time, as unit economics and customer acquisition costs improve, you’ll probably tip into the blue. Maybe. Hopefully.
At the very least, that’s what your investors will be betting on. So that means your business model slide needs to paint a picture that shows where you’re at now and how the business can grow over time. READ MORE
Venture capital comes in different sizes. We have operator VCs on one side, and on the other, we have pure financial investors. Then, we have Corporate Venture Capital (CVC) firms—venture capital divisions of big corporations. Most big tech companies, including Intel, Google, Microsoft, Dell, Facebook, etc., have a CVC fund, and invest in startups for mainly two reasons: READ MORE
The Securities and Exchange Commission and venture capitalists have traditionally lived in two different worlds, but if a new rule from the regulatory agency advances, VCs could find their world under increased scrutiny.
Nearly a year ago, the SEC started looking at adding regulations around how private investors — think private equity firms, hedge funds, some real estate investment companies, and yes, venture firms — vet deals. READ MORE
It's private equity recruitment season in Europe and America. This time last year, major private equity firms in America were camped out in hotels in New York City, interviewing candidates through the night. One year on, a chill wind is blowing, but private equity firms are pressuring candidates all the same.
"The private equity recruiting cycle is continuing and firms are giving out exploding offers in the usual way," says Anthony Keizner, a partner at Odyssey Search Partners in New York. At top firms like KKR and Blackstone, this typically means candidates have just 24-hours to decide whether to accept, or not. "Candidates aren't allowed to sit on offers because there's a big opportunity cost to losing out on other candidates if the candidate with an offer decides not to accept," Keizner explains. READ MORE
Once upon a time, if you wanted to build a tech startup, you relocated to Silicon Valley. Full stop. While there’s no disputing SV’s place and continued prominence in the startup world, today’s early-stage founders have more geographic freedom and funding options than ever before.
While that’s certainly a good thing, it’s still far from easy — especially when you’re facing economic headwinds. This is why we’re excited that Mark Crane, a partner at General Catalyst, will hold forth at TechCrunch Early Stage on April 20 in Boston, Massachusetts. READ MORE
There was a moment last spring when startup founders across the globe experienced a sudden collective whiplash. It was the Great Venture Capital Reset of 2022, when fundraising activity screeched to a halt after running fast and hot for the longest bull market in VC history. Untold numbers of in-progress funding rounds sputtered in the process, and every startup that had planned to raise in the second half of 2022 found a very different market waiting for them. READ MORE
Venture capital and other private funding sources continue to be an important pathway for financing early-stage companies. Unfortunately some startups that raised money did so by misrepresentation and in certain cases fraud, only to end up failing when the truth was finally discovered - resulting in significant losses for their investors. READ MORE