Capitalists are desperate to look beyond the impending disintegration of humanity’s ecological niche and the unraveling of already threadbare social programs to imagine something more hopeful (and profitable). For those eager to usher in a better future, the private financing of technological innovation has long been a source of optimism. After all, it created Apple, Google, Facebook, and most of the rest of the American tech companies that have swept the world. But if you inspect it at all, the sheen rubs right off. READ MORE
Recently Public AI-Focused Startups Are Not Hot
Artificial intelligence is the subject generating by far the most buzz in startup circles.
But if we look at public markets, it’s clear that an AI focus hasn’t been a recipe for stock market gains. This is evident looking at recent performance of the most highly valued AI-oriented companies to go public in the quarters leading up to the market peak. READ MORE
Venture capital investment in clean energy startups soars
Global venture capital funding for clean energy startups jumped to $12.3 billion last year, up from $1.9 billion in 2019, propelled by investment in battery technology and new government subsidy schemes in the United States and Europe, new data shows.
An analysis from consultants Oliver Wyman based on data from Crunchbase showed that investors in North America led the way in recent clean energy investments, providing 57% of last year's total, with European players behind on $3.5 billion. READ MORE
Tips for Fundraising in an Economic Downturn
The stock market faced significant challenges in 2022, with the S&P 500 dropping by nearly 20% and the tech-heavy Nasdaq falling more than 33%. This market volatility drove valuations down and led to a 65% reduction in both IPO and M&A activity, resulting in a liquidity crunch for private-market investors. Consequently, the venture deal count for private companies declined 29% year over year, and early-stage venture deal activity in Q1 of 2023 witnessed a six-quarter consecutive drop in deal value, despite the common assumption that early-stage companies are insulated from market turbulence. READ MORE
What’s Happening With Seed And Series A Funding, In 4 Charts
When venture funding started to turn south after a blockbuster year in 2021, seed and early-stage funding was at first relatively unscathed. Investment into seed startups globally actually grew in Q2 2022, even as venture investment overall dropped off dramatically. READ MORE
SEC fines 10 microcaps for flawed stock offerings
Each of the 10 microcap companies secured qualification from the SEC between December 2019 and May 2022 under Regulation A, but then changed their securities offerings in ways that violated terms of their exemption from the more costly and detailed procedures required of larger businesses, the SEC said. READ MORE
Hey founders, don’t screw up communication with your investors
As we continue into an era of economic uncertainty, managing communication with investors is crucial for the success of a startup. In my experience working with founders, I’ve found a few key ways that startups can manage investor relations to foster growth during a downturn. READ MORE
US Semiconductor Startup Funding Slows Even As AI Beckons
Semiconductors have seemed to carve out a permanent place in the news cycle recently, whether it concerns SoftBank-backed chipmaker Arm attempting to go public or huge tech titans battling it out for AI server chip dominance.
The industry appears to be on investors’ minds too — although not like in recent years and certainly not when it comes to U.S.-based semiconductor startups. READ MORE
PE turns to add-ons with large LBOs out of reach
Private equity investors are holding off on big ticket leveraged buyouts until debt becomes affordable again. In the meantime, add-on strategies provide some relief.
Tasked with a challenging exit environment and a dwindling supply of affordable debt financing, PE managers are turning to add-ons, which are smaller-sized target acquisitions made through existing portfolio companies, to meet capital deployment mandates and keep portfolio company multiples afloat. In 2022, add-ons comprised 77% of US PE deals, an approximate jump of 3 percentage points from 2021, according to PitchBook data. READ MORE
Have Tech Jobs Lost Their Luster?
When Roger Lee graduated from Harvard in 2008, he and his fellow classmates were thrust into a new kind of working world. Young and college-educated, many of them witnessed, for the first time, the meltdown of the banking sector, and were disillusioned with the idea of working in the once-stable finance field.
Years later, Lee founded the crowdsourced layoffs database Layoffs.fyi, which began documenting tech layoffs during COVID-19. Since then, Lee has been entrenched in layoffs data and employee outlook data with his co-founded companies Comprehensive and Human Interest, which offer employee benefits. READ MORE
What Does Last Year’s IPO Class Have To Teach 2023’s Public Market Hopefuls?
Last year, tech IPOs slowed to a plodding walk. In 2023, they’re down to a crawl.
The outlook for tech IPOs isn’t much livelier for the second half of this year either, with interest rates at their highest in 16 years and lackluster performance from last year’s IPO class further dampening enthusiasm for new public listings. READ MORE
Private equity investor identified as political contributor allegedly duped by George Santos
Private equity investor Andrew Intrater is one of the people federal prosecutors allege Rep. George Santos induced to donate money as part of an alleged scheme that diverted purported political contributions to Santos’ personal use, Intrater’s lawyer confirmed to CNN on Thursday.
In a 13-count indictment made public Wednesday, prosecutors alleged that Santos and an unnamed associate duped two donors – described only as Contributor #1 and Contributor #2 – into giving $25,000 apiece to support the Republican’s candidacy last year. READ MORE
FDIC’s Sales of Failed Banks Leave Private Equity Firms Empty-Handed
No matter how dire the situation when a bank fails, private investment firms can’t seem to get a nod for their salvage offers during US-run auctions — leaving them to wonder if they’ll ever be allowed to win. READ MORE
Are private markets a route to higher returns?
The latest bout of turmoil in global markets has sent fund managers scurrying to reassess their risks, not least in US banking shares. But one strategy seems likely to survive the stock take, just as it has the ups and downs of the past three years: the drive to private markets. If you believe the hype surrounding private assets, the old model of managing your money via a long-only fund run by a stock picking manager is “out” and everything private is in. READ MORE
US VC Valuations Report
US VC valuations extend slump as down rounds creep up in Q1
Venture capital valuations continued their descent in Q1. The dearth of IPO exits, a pullback from nontraditional investors, and ongoing economic headwinds have all contributed to lower valuations and smaller round sizes for all stages except seed. READ MORE
The State Of Venture Capital: The Pendulum Swings
As the pendulum swings, it’s important to assess where venture capital stands and how investors may approach it in both the near term and the future. As someone who has witnessed down markets, up markets and everything in between, below are some core ideas worth considering. READ MORE
Labor Organizers Launch a New Model for the Fight Against Private Equity
On May Day, a small group of labor advocates and workers weaved through midtown Manhattan, stopping at the shiny corporate headquarters of several firms with names like KKR, Sycamore Partners, Apollo Global Management, BC Partners and Roark Capital Group.
Most people don’t recognize these names, or if they do, know very little about them. But these are some of the wealthiest and most influential firms on Wall Street, behemoths within the ultra-powerful but opaque financial sector known as private equity — the arm of Wall Street that oversees trillions in assets and specializes in buying out, restructuring and selling off privately owned businesses to turn a big profit. READ MORE
"It’s difficult to raise Seed today, and those who succeed have to work harder for it"
As we approach the finals of the StartUp+ competition, that serves as a springboard for startups at the beginning of their journey, we checked with senior members of the ecosystem on the affects of the changes the high-tech industry has been undergoing recently, where the opportunities are, and what recommendations investors give to their portfolio companies to survive and thrive in this period. READ MORE
How Startups Can Manage Their Cash Better — 4 Tips from a Venture Capitalist
The bankruptcy of Silicon Valley Bank caused a great deal of stress for many startup founders. Although U.S. financial regulators intervened and took charge of customer deposits, the incident has shown that financial markets remain unstable.
Amidst a banking panic, Signature Bank has suffered bankruptcy, while Credit Suisse is being acquired by its competitor UBS; First Republic Bank's customers have recently withdrawn over $100 billion. READ MORE
Pink Slips to Pitch Decks: Laid-Off Tech Workers Roll The Dice In Iffy Funding Market To Start Their Own Companies
CoFoundersLab is serious about helping workers caught in the tech industry’s mass layoffs.
The entrepreneur networking and skill-building site is offering free premium memberships to laid-off tech employees. “F’ Da Man,” the website says. “You’ve built it for them. Now build it for yourself!” READ MORE