As the US economy grapples with the effects of higher-for-longer interest rates and tightening financial conditions, the venture capital market is down but not out.
Our latest Quantitative Perspectives report, Putting the Pieces Back Together, offers an in-depth analysis of the current state of the US VC market and provides key insights for GPs, startups, and service providers to make informed decisions. READ MORE
Why A Recession Can Be Good Timing For Corporate Venture Capital
After years of rising real estate prices and a robust stock market, the economy started to slow down last year. Some experts say we are already in a recession; others say one could arrive soon. News headlines cite an increasing number of layoffs in the tech industry. Despite the negative environment, a recession may be a good time for corporate venture capital to thrive. READ MORE
How Venture Capital Can Avoid the Next Silicon Valley Bank Fiasco
In the public imagination, venture capitalists are often seen as independent wealthy actors seeding early-stage companies with their personal money. But the vast majority of VC capital is from “LPs”—or limited partners—including public pensions, university endowments, hospitals, and wealthy families. In other words, venture capitalists manage large sums of other people’s money. This makes them de facto gatekeepers of innovation, deciding what gets built and who benefits. When this system works, we end up with world-changing companies and technologies. When it fails, as in the case of Silicon Valley Bank, we risk setting ourselves up for stagnation and decline. READ MORE
Private Equity vs Venture Capital: 6 Key Differences
From looking at the risk acquisition to seeing the fund size, here are six answers to the question, “What are the key differences between private equity vs venture capital?” READ MORE
Biotech startups face ‘Series A cliff’ as venture capital stays cautious
The rapid demise of Silicon Valley Bank put an unwelcome spotlight on the financial position of many small biotechnology companies that relied on the storied lender.
But to the people who form and build startups, SVB’s collapse is a sidebar to a longer-brewing threat: a tightening cash crunch for a generation of young drugmakers. READ MORE
Venture Capitalists Put $16.2 Billion Behind Clean Energy In 2022
Earlier this month, analyst firm Pitchbook published its analysis of venture investments into clean energy in 2022. The firm found that 2022 was a record year for the sector, with investments hitting $16.2 billion for the year, just barely topping 2021’s $16 billion. A driving factor behind part of the surge in investment was the war in Ukraine, which highlighted the need for energy resilience. That said, as the year went on and the energy sector looked more stable, the fourth quarter saw a year over year drop of 46.5% in terms of venture capital raised in the sector. READ MORE
Are solo GPs screwed?
Entrepreneur Ankur Nagpal raised a $70 million venture fund last year, called Vibe Capital, from over 200 investors. But now, as the market shifts and LPs are less interested in venture capital, the Ocho founder is shrinking the fund side by roughly 43%, canceling capital calls, and, ultimately, sending back money that had already been wired to the fund. READ MORE
Here’s What Every Founder Should Be Asking Their VCs Right Now
During times of economic uncertainty like those we currently face, founders must overcome numerous challenges in managing their businesses, teams and investor relations.
Cash flow becomes critical, sales may be declining, and fundraising can be more difficult. In such situations, founders need support from their VCs to survive and thrive in the long run. READ MORE
How Early-Stage Startups Can Survive and Prepare for the Investor Winter
The investor winter is here, and it is hitting both industry moguls and early-stage companies hard. No sector remains unaffected, with layoffs spreading from tech to consulting, and the collapse of Silicon Valley Bank sending the banking industry scrambling.
What varies, however, are the approaches businesses take to stay in the game and survive in the bear market. Half of the companies I work with take the “freeze” strategy, biding their time to see what will happen next. So far, these companies are losing — their capital efficiency metrics continue to plummet, making them less attractive to investors. READ MORE
Getting To Series A Has Gotten Harder
For seed-funded startups, the odds of graduating to a Series A round have never been particularly favorable. But as venture funding contracts, the chances have gotten even slimmer.
That’s the broad finding from our latest perusal of U.S. Series A funding, which shows that investment is on track to hit the lowest quarterly total in over two years. READ MORE
Credit Suisse Also Played An Active Role In Startup Financing
When it came to startup funding, Credit Suisse was no Silicon Valley Bank.
That said, the troubled Swiss banking behemoth, which was just acquired by rival UBS, was no slouch in the venture investment and debt arena either. READ MORE
Here Are 3 Big Areas Where AI Is Cropping Up In Agtech
While Silicon Valley has transformed every industry from health care to banking, agriculture has remained largely untouched — until now.
Ever since OpenAI’s breakthrough with ChatGPT, the term AI has been thrown around so many times it’s starting to lose its meaning. Nevertheless, artificial intelligence has seeped into every industry from enterprise software to autonomous vehicles, taking around 10% of global venture dollars in 2022. READ MORE
Skin In The Venture Capital Game
Venture capital (VC) is a complicated business with probability theory at its heart. Basically, you are swinging at the fences with a wide dispersion of potential outcomes and returns, just like in baseball—from home run to strikeout. READ MORE
SVB run exposes rifts in chummy venture capital world
Silicon Valley Bank’s collapse laid bare divisions in the usually clubby venture capital community, with some investors blaming their counterparts for igniting a panic that brought down a beloved startup business partner.
In the chaotic early hours of the bank run on SVB, many VCs advised their companies to yank their deposits from the troubled lender. In the aftermath Friday, other investors publicly lambasted their industry for its role fueling the flames. READ MORE
Pooptech Startups Are Passing The Smell Test
Pooping, burping and farting might sound like subjects more likely to elicit excitement from a gathering of toddlers than a group of venture capitalists.
But in reality, technologies tied to these most basic of bodily functions are drawing some large investments, with both agtech and cleantech venture firms leading the way. READ MORE
SVB’s Demise Cools An Already Chilly Climate For Startup Funding
For the U.S. startup funding ecosystem, Silicon Valley Bank’s collapse looks like the equivalent of adding ice to an already cold bath.
Already, venture funding has contracted sharply from its peak. In the fourth quarter of 2022, North American startup investment was down 63% year over year, driven largely by plummeting later stage financings. READ MORE
The anatomy of a successful VC pitch
Gleb Maltsev has spent more than a decade coaching thousands of people on how to tell stories. The biggest takeaway? The majority of pitches miss their mark. Maltsev deep dives into why and what you can do about it (with visuals throughout). has spent more than a decade coaching thousands of people on how to tell stories. The biggest takeaway? The majority of pitches miss their mark. Maltsev deep dives into why and what you can do about it (with visuals throughout). READ MORE
A.I. Funding Frenzy Escalates
When four leading artificial intelligence researchers left Google this year to create a start-up called Mobius AI, they weren’t sure what their product might be — just that it would involve A.I. technology that could generate its own photos and videos.
Within about a week, two of Silicon Valley’s top venture capital firms, Andreessen Horowitz and Index Ventures, had swooped in with a funding offer, three people with knowledge of the matter said. READ MORE
Venture Capital Financing in Uncertain Times
Many companies and venture capital (VC) investors are encountering down rounds for the first time in a decade or longer. Given the long heritage of VC financing structures, we can look to previous downturns to identify investment terms and tools that are once again relevant. This insight provides a general summary of some techniques VCs and venture-backed companies can use to recalibrate risk, including the anatomy of a down round. READ MORE
Venture capital and private equity firms reportedly working on acquiring parts of SVB
Venture capital firms and private equity groups are reportedly working on plans to acquire and preserve parts of Silicon Valley Bank to continue serving clients in the technology sector.
The Financial Times reported today that a group of more than a dozen VC firms, including General Catalyst Group LLC, Andreessen Horowitz LLC and Khosla Ventures LLC, have been holding talks on enabling SVB to continue lending to, investing in and advising companies in the sector. One of the proposals is said to include the formation of a consortium with Apollo Global Management Inc. to bid for portions of SVB. READ MORE
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