After a bumpy 2022, there was little reason to believe 2023 would be any smoother in the realm of tech, startups and venture capital.
Through the first six months, the new year has done anything but disappoint on that front. READ MORE
Sustainability Funding Sees Only Modest Decline As Urgency Trumps Frugality
Catastrophic climate change projections are only getting more pronounced. And across the globe, overall startup investment is on the decline.
These two trajectories don’t fundamentally have anything to do with each other. The planet doesn’t check startup funding data before deciding how many record heat waves and hurricanes to unleash. And the venture pullback, a comedown from a cyclical bubble, has nothing to do with climate dynamics. READ MORE
Venture capitalist Marc Andreessen: AI sent world into a ‘freeze-frame moment’
The world is in a "freeze-frame moment" with artificial intelligence, according to Netscape co-founder Marc Andreessen.
He told the "Lex Fridman Podcast" last week that "everybody is kind of starting at [AI tools] wondering what to do," pointing to models like GPT-4.
However, the co-founder of the venture capital firm Andreessen Horowitz told Fridman that the ability to learn and produce has increased "a million-fold." READ MORE
The Future Of Technology: Investors Share Reasons To Be Optimistic
It’s not hard to be worried about the future and many of the concerns we may have are indeed valid.
With big global challenges that are either here already like climate change or looming like the risk of AI taking a life of its own, there’s never been more pressure on entrepreneurs, investors, policymakers, businesses and customers to step up and make the right decisions. READ MORE
Startup Survival Kit: Essential Legal Insights For Founders
Navigating the intricate maze of startup law can feel like a journey through uncharted territory. Each phase—setting up a business, drafting legal documents and managing the complexities of raising capital—presents unique challenges. You may assume that hiring a professional lawyer is the only guide you have, but what if there's a more efficient and cost-effective path? READ MORE
What A Changing Fundraising Landscape Means For Founders
2021 was a whirlwind year for Venture Capital, marked by seemingly endless capital, rapid markups and unprecedented valuation multiples. Fast forward to today, and the VC market has undergone a massive reset, changing the game for both early-stage founders and investors. While some changes are obvious, there are also subtler shifts impacting VC firms that founders must navigate in this transformed landscape. READ MORE
These Are The Sectors Where Hot Seed-Stage Startups Are Clustering In 2023
The clustering effect is clear in this year’s vintage of seed-funded startups. A handful of categories accounted for an outsized number of investments.
What were some of the standout areas? Using Crunchbase data, we scoured through hundreds of the largest seed and pre-seed rounds in 2023
to identify trends. The following is an assortment of a few that stood out, from AI assistants to clean power to esports. READ MORE
VC Investment in US Falls 50.2% YoY to $55.3B During January-May 2023
Venture capital (VC) funding activity in the US experienced a significant decline from January to May 2023.
A total of 3,532 VC funding deals of worth $55.3 billion “were announced in the US during the period.” This represents “a year-on-year (YoY) decline of 36.4% in terms of volume announced and a massive 50.2% in terms of value,” according to GlobalData, a data and analytics company.
An analysis of GlobalData’s Financial Deals Database reveals “that a total of 5,552 VC funding deals of $111.1 billion were announced during January-May 2022.” READ MORE
Tiger Global’s search for liquidity illustrates how busted the late-stage market is
The late-stage market is whacked. You only need to look at how Tiger Global Management, previously one of the most active investors in all of startup-dom, has failed to find a buyer for a large basket of its stakes in private tech companies.
The fact that Tiger did not, as PitchBook wrote, find a buyer for “a percentage of its stakes in about 30 companies [packaged in a] strip sale” implies the issue here was that Tiger did not find a buyer willing to pay however much it wanted for those stakes. READ MORE
Silicon Valley VCs rush into defence technology start-ups
Investment in military tech start-ups is booming as the war in Ukraine and geopolitical tensions with China leads to growing confidence that the US government will give lucrative contracts to Silicon Valley companies making cutting-edge defence systems. US venture capitalists have agreed more than 200 defence and aerospace deals in the first five months of this year worth nearly $17bn — more than the sector raised during the entire of 2019, according to data from PitchBook. READ MORE
This Generative AI Company Doesn’t Want To Be Called A Generative AI Company
Recently, a couple of venture capitalists knocked on Ben Pham’s door to hear a pitch on his new advertising startup named Obello
Pham had decades of experience in advertising with Character, a branding agency he co-founded with Oliver Ralph that worked closely with the likes of Apple, Netflix and Facebook. After selling the company to marketing giant Dentsu, Pham and Ralph were working on a new generative AI product. READ MORE
Top 10 U.S. Private Equity Firms Of 2023
Private equity is one of the most potent forces in the world of finance. PE firms buy companies and participate actively in their businesses to help them grow and achieve their full potential.
These investment firms operate in some of the most dynamic sectors in the economy, particularly technology, and they foster innovation that has a deep impact across the economy. The U.S. dominates the private equity industry globally, and private equity firms control more than $6 trillion in assets in the U.S. READ MORE
Opportunities and Challenges in Private Equity Recruiting
Private equity firms are saying that talent is the most important factor in driving growth. While financial engineering, inorganic growth, and market expansion remain important tools in the private equity toolbox, talent continues to emerge as key to growing companies and achieving the investment thesis, according to a report from Bespoke Partners. Yet unlike strategic assets, intellectual property, or other resources that fuel growth, talent can be notoriously difficult to optimize. In fact, the biggest challenge for the PE sector is getting talent right, according to Nat Schiffer, managing partner at The Christopher Group. “PE firms often compete with other financial services firms, technology companies, start-ups, and other industries for the limited pool of qualified talent with the necessary skill-sets and experience for the PE industry,” he said. “The intense competition for top talent can make it challenging to attract and retain qualified candidates who may have multiple options.” READ MORE
Silicon Valley’s Manic Quest to Change the World Amidst the AI Boom
A gathering of 300 entrepreneurs, venture capitalists, journalists, and self-proclaimed thought leaders took place at Shack15, a stylish social club in San Francisco’s Ferry Building in late May. according to Bloomberg, The event, called a “Generative AI Meeting of the Minds,” marked a significant shift from the challenges faced during the pandemic and earlier this year. The atmosphere was filled with optimism and excitement, as participants discussed the resurgence of Silicon Valley and its potential for reinvention. Futurist writer Peter Leyden, the host of the evening, captured the prevailing sentiment, highlighting the turning point for the region and receiving applause for his inspiring speech. READ MORE
Venture capital funds forced to slash targets amidst market turmoil
The crisis in the high-tech industry continues to impact American venture capital funds, leading them to announce reductions in their capital raising targets one after another. The latest fund to be affected is Tiger Global, which played a significant role in Israeli high-tech during the bubble years of 2020-2021. Many believe it was responsible for the inflated valuations of companies. Tiger Global has raised only $2.7 billion for its new fund, 55% less than its initial target, and stated its ongoing efforts to raise funds. Another fund, TCV, also reduced its fundraising target to 55%-75% of the planned amount, originally set at $5.5 billion. READ MORE
Fifteen Percent Pledge founder launches a VC fund for Black founders
A decade ago, Aurora James, founder of the luxury shoe label Brother Vellies, was eager to grow her nascent business. She needed a cash infusion to expand production and create a more robust website. But as a Black woman, it wasn’t easy to secure funds. READ MORE
What happens to the smaller VC firms in a more conservative market?
Smaller venture funds are finding a way to manage in the midst of a conservative market.
As with all bear markets, the appetite for risk drops, and although emerging fund managers are often noted to outperform their more established counterparts, some limited partners are weary of bringing on new venture partners. Instead, they retreat to their trusted, established partners. READ MORE
Private equity's role in SPACs grows as market shrinks
Private equity took on a larger role in the market for special purpose acquisition companies even as the number of so-called blank-check companies contracted sharply in the wake of the 2021 SPAC boom.
More than 18% of SPACs that held an initial public offering in 2022 were backed by private equity, up 7 percentage points from 2021 and 14 percentage points from 2020, according to an S&P Global Market Intelligence analysis that tracked SPACs with at least 5% ownership by a private equity or venture capital firm. In the first five months of 2023, as some SPAC activity shifted to Asia from North America, nearly 17% of all SPAC IPOs globally were private equity-backed SPACs. READ MORE
How private equity ate the market
The number of publicly traded U.S. companies has fallen by more than half since 1996, said Nicole Goodkind at CNN. "Back then, the number exceeded 8,000 companies." Today, the count has dropped to just 3,700, according to data from the Center for Research in Security Prices. "It's not that America has half as many companies as 30 years ago — it's that companies are increasingly staying private." The IPO market fell by nearly 95% in 2022 after lackluster returns the year before. There are also "about five times as many private equity-backed firms in the U.S. as there are publicly held companies," holding more companies back from listing. In 1999, the average U.S. tech firm went public after four years. It's now about 11 years. READ MORE
Private equity risks gorging on its secret sauce
Private-capital pioneers, such as Blackstone’s (BX.N) Steve Schwarzman, benefit from public-market inefficiencies even as their listed buyout shops grapple with chronic valuation problems. Investors prefer pedestrian but steady management fees over the lumpy share of fund profit that is the industry’s special sauce. It’s yet another inefficiency on which to capitalize, but only up to a point. READ MORE