Level wants to back your fund — and your portfolio companies too

In 2023, funds of funds (FoFs) are on track to raise the smallest amount of money in more than a decade. At the same time, muted venture deal activity has many firms ditching their follow-on funds. Despite these twin trends, a new emerging manager is looking to find success with a fund that targets both.

Level Ventures has raised $104 million for its debut fund, a data-driven, three-pronged investing strategy that uses in-house algorithms to back other emerging managers, invest in promising companies from those managers’ portfolios and source deals of its own. READ MORE

What is corporate venture capital?

The 2008 Global Financial Crisis marked a period of decline across the capital markets, when exit value and public listings fell precipitously. But despite these challenges, corporate M&A and investment activity during that era remained resilient by comparison—based on a variety of factors at play, including record capital on corporate balance sheets.

In a recent report highlighting corporate venture capital (CVC) during economic downturns, PitchBook analysts say we’re seeing similar resiliency amid the present-day slump. In the Q1 2023 Analyst Note, PitchBook VC Analyst Vincent Harrison reports that 26.2% of all US VC rounds in 2022 included a CVC investor—the highest proportion of overall US VC deal count ever observed for CVC deals. READ MORE

Big tech corporate venture capital 🤝 generative AI startups

As the race to build generative AI tools for the enterprise devolves into a battle royale, big tech companies are busy wielding their most powerful weapons: checkbooks. READ MORE

Survey finds majority of venture capitalists have invested in AI

PitchBook, the premier data provider for the private and public equity markets, today released findings from a new survey conducted in partnership with Collision, a Web Summit event and North America's fastest growing technology conference, which takes place June 26-29, 2023 at Enercare Centre in Toronto, Ontario. PitchBook is sponsoring the Investor Lounge at Collision, where investors in attendance can work, take meetings and network.

This is the seventh survey PitchBook and Collision have partnered on at Web Summit conferences and provides an insight into investment strategies, representation of women in VC, and sentiment toward emerging technologies, such as artificial intelligence, climate tech and fintech have changed amid market uncertainty. Nearly 100 global venture capital (VC) investors attending the conference completed the survey. READ MORE

Tips to reinvent venture capital

According to Chad Cardenas, Founder & CEO of The Syndicate Group (TSG) and Managing Director of Syndicate Venture Partners, the Silicon Valley ecosystem has long relied on a traditional model of venture capital funding to nurture tech startups, but this has caused the ecosystem to stagnate last year, creating a financial dilemma for many startups. READ MORE

Cash Is Drying Up in the Late-Stage VC Market

The second half of the year is looking bleak for companies backed by venture capital firms, especially for those at later stages.

The companies that are most starved for capital are those that are currently in Series C and D round fundraising. These are most likely to raise at lower valuations compared to their previous funding rounds, according to PitchBook’s latest VC outlook. For such companies, which are defined as late-stage companies by PitchBook, the current demand for capital exceeds the available supply by approximately 2.8 times. In the second quarter, 12.3 percent of late-stage companies that raised funds experienced a down round, up from 8.5 percent in the first quarter. READ MORE

Venture capital fundraising expected to drop in 2023

U.S. venture capital firms are expected to raise between $120 billion and $130 billion in 2023, which would be a drop from the total of $168.3 billion raised in 2022, according to PitchBook data released Tuesday.

So far this year, U.S. venture capital firms have raised a combined $27.6 billion as of June 13. READ MORE

Are Small, Early-Stage Venture Capital Funds The Next Big Thing?

In recent conversations with venture capital professionals, one thing is abundantly clear: This current market is a profoundly challenging time to be fundraising as an emerging manager. As the market turned down last year, the percentage of limited partner dollars going into emerging funds decreased, a trend that appears to be continuing into 2023. Many LPs are either refraining from investing in the VC asset class entirely or, in a “flight to safety,” are focused only on investing in “brand name” funds. This leads to a concentration of LP capital in the same big funds that have been around for decades, despite their recent vintages likely struggling as the market and private valuations majorly reset. READ MORE

Silicon Valley braces for the worst as funding dries up

Clear evidence of just how tough venture capital land is getting emerged this month with setbacks for two high-profile industry firms. After almost a year of marketing new, multibillion-dollar funds, both Insight Partners and Tiger Global have failed to reach anywhere near their targets. After an already dismal year, it was a particularly painful augury for venture capital and start-ups. READ MORE

As $100M+ venture rounds evaporate, IPOs might have to carry the weight

Earlier this year we wrote that the “the $100 million venture round is going extinct.” Often our predictions wind up sideways. This time we were on the right track.

According to new data from PitchBook, the U.S. venture market is continuing to endure lackluster velocity for nine-figure investments into private companies, colloquially referred to as “mega-rounds.” READ MORE

From AI To SVB And Everything In Between — A Quick Look Back At The First Half Of 2023

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