Startups are young companies founded with a new idea looking to disrupt the market. Entrepreneurs are driven by innovation and want to create entirely new products or services to cater to existing deficiencies in the market. We can also say that a startup has two main characteristics; innovation and growth. A startup's ability to scale really defines its potential impact on different markets. That’s why most of the startups are known for the disruption in their respective industries. But, not all startups succeed and the majority of them are prone to failure. According to Startup Genome, about 90% of startups completely fail, while 1.5% of startups end up with a successful exit of $50 million across the top eight U.S. startup networks. READ MORE
Don’t get carried away with SPAC fever
VinFast Auto’s 400% surge after going public in a SPAC merger earlier this month is the lone bright spot for blank-check deals completed in August.
Beyond the Vietnamese electric-vehicle maker, investors who have held on to shares of newly public companies from tie ups with special purpose acquisition companies have mostly endured nothing but losses. READ MORE
This Miserable Market Could Be a Catalyst for Private Equity Firms
The days of private equity firms simply borrowing money to buy a company and juicing its near-term performance to generate good returns are long gone. But now, in a tough market with higher interest rates, asset managers have to work even harder to improve their portfolio companies, and themselves, to deliver strong returns. READ MORE
US private funds industry sues securities regulator over new rules
Six private equity and hedge fund trade groups on Friday sued the U.S. Securities and Exchange Commission (SEC), arguing the agency overstepped its statutory authority when adopting sweeping new expense and disclosure rules last week.
SEC Chair Gary Gensler said the rules will increase transparency and competition in the private funds industry, which oversees around $20 trillion in assets and has been accused by advocacy groups of opacity and conflicts of interest. READ MORE
Venture To Defense Tech Startups Still Lags, But Experts Say Interest Is Growing
Late last year, software and hardware tech startup Anduril made headlines when it closed a massive $1.5 billion Series E.
While the raise was noteworthy for its size alone — it was the fourth-largest round raised by a U.S.-based startup last year — it also was eye-catching because it went to a defense and security firm. READ MORE
Keep your equity (and your sanity) while you’re growing your business
There’s no doubt about it—fundraising is the most difficult part of launching a business and being an entrepreneur. But depending on who you are, that part of the journey can be even more daunting due to bias and a system that doesn’t see every entrepreneur as an equal.
So many disparities exist in the world of venture capital, but one thing is and has always been clear: Women, especially women of color, don’t have the same access to capital that their white male counterparts do because of bias that exists within the system. In 2021, Black founders only received 1.2% of venture capital funding in the United States. This is absurd. READ MORE
VCs Who Wait Too Long For A Market Rebound Risk Losing Out On The Best Deals
The ongoing downward trend in venture funding has many founders desperately trying to secure their next round.
Runways are running out, and many great startups with strong businesses and future prospects are willing to take a hit on valuations, and even take a downround, in order to continue operating. READ MORE
AI Start-Up Investments Bucking Venture Capital Decline Trends
According to Crunchbase, over a quarter of the total investments in the US based startups this year has gone toward AI companies, more than double the percentage of last year. This is equivalent to 1 in 4 dollars has been invested in USA AI startups in 2023, so no wonder every company building a new technology has AI emblazoned everywhere in their pitch decks. Comparatively between, 2018 and 2022, AI startups, received an average of 12% of funding capital. READ MORE
New IPOs offer a true reflection of late-stage VC valuations
After about a year-and-a-half without liquidity prospects, investors and employees of some of the largest unicorns may see a glimpse of light at the end of the tunnel.
Last week's IPO filings of Instacart and marketing automation company Klaviyo mean that once they debut, various types of investment activity—from new late-stage rounds and secondaries trading to other public offerings—are likely to see a pickup. That is in large part because there will finally be more clarity about what private companies are worth. READ MORE
Many Boom-Era Startups Will Face A Fundraising Cliff In 2025
You can tell a lot about investors’ enthusiasm for a startup by the pace of its fundraising.
A company that takes just months to go from one round to the next looks like a hot property. One that takes a couple of years is probably well-regarded, albeit maybe less buzzy. READ MORE
This Year’s Startup IPOs Have A Very Mixed Track Record
We often discuss the IPO market in binary terms. The window for new offerings is open, or it’s shut. Big exits are happening, or they’re not.
This year, such rigid nomenclatures haven’t applied. Rather, market debuts have worked out well for some, horribly for others, and sort of “meh” for many more. There’s no obvious hot sector, and early pops can be short-lived. READ MORE
Many Boom-Era Startups Will Face A Fundraising Cliff In 2025
You can tell a lot about investors’ enthusiasm for a startup by the pace of its fundraising.
A company that takes just months to go from one round to the next looks like a hot property. One that takes a couple of years is probably well-regarded, albeit maybe less buzzy.
Once a few years pass with no new round raised, however, a startup’s shine has likely faded. If four or more years go by, the probability of ever raising a subsequent venture funding round falls precipitously. READ MORE
SEC makes biggest overhaul of $20T private equity, hedge fund industry in years
The Securities and Exchange Commission voted to overhaul rules for private equity and hedge funds, but in a victory for the industry did not make it easier for investors to sue fund managers and also did not ban arrangements that make it easier for some investors to cash out than others.
The securities regulator’s five-member panel voted 3-2 in favor of a series of changes aimed at increasing transparency, fairness and accountability in the private funds industry, which has more than doubled its assets over the past decade. The industry manages around $20 trillion in assets. READ MORE
Private Equity Turns to Left-Field Finance to Get Deals Done
Private equity firms are turning to a new weapon to help them get their buyouts over the line: less-than-conventional funding.
M&A activity has slumped this year in part because spiraling interest rates have made traditional PE investors nervous about leveraged acquisitions. Buyout firms are increasingly using expensive subordinated debt — also known as junior financing — to help fill funding gaps and get deals done. READ MORE
How to play the private equity game without a fund
In 1998, Scott Dickes left his job as a vice president at a private equity firm and embarked on the quixotic journey of a fundless sponsor.
A fundless sponsor (or "independent sponsor," per a more recent conceptual rebrand) is an investor that pursues a deal without the security of the committed capital in a PE fund. A typical timeline for an independent sponsor starts when a PE professional spins out of an established investment shop, spots an asset that shows some potential, negotiates the acquisition, and scrambles to get the equity financing and leverage later. READ MORE
Private Funds Exhale Over SEC Rule Despite Big Compliance Costs
Hedge funds and private equity firms are breathing a sigh of relief, welcoming concessions the Securities and Exchange Commission made when green-lighting a rule that imposes new restrictions and requires more fee disclosures.
The SEC adopted, by a 3-2 vote Wednesday, regulations aimed at increasing transparency in the multi-trillion-dollar private fund industry. But the agency eased—and in some cases abandoned—some of the most contentious parts of its initial proposal. READ MORE
Women Founders Still Get Less Than 2 Percent of All Venture Funding. How This Woman-Led Company Beat the Odds
I proclaimed myself an entrepreneur eight months after the passing of my father, Martin Becker. Dad was a Holocaust survivor who came to America at age 12 with no money, family, education--or ability to speak English. He started a small salvage business in San Francisco, because, having been drafted to serve in the Korean War, that's where he disembarked upon his return. He sold dented cans and jars with the labels torn off at steep discounts, and then became an importer/exporter, wholesaling canned foods to hotels and restaurants. I'd accompany him on sales visits. We would always follow the meetings by eating dinner in whichever restaurant he had made the sale to. He later told me those were the happiest days of his life. READ MORE
Venture capital’s cold war
The India-based VC firm Peak XV is having an exciting few months. A TechCrunch report on Friday laid out the firm’s good news, bragging that it had signed 10 new term sheets and made three exits since it split with the U.S.-based Sequoia Capital in June. By all accounts the firm is thriving, at least by the numbers, and it’s a perfect example of how the global venture capital game is fracturing.
Startup funding is going through the same chaotic decoupling that’s roiling supply chains and semiconductors — and just like hardware, it’s mostly about the rivalry between the U.S. and China. As VCs in the U.S. pour money into the next generation of companies, China hawks in the U.S. government want to make sure those funds aren’t flowing to America’s enemies. At the same time, VCs want to put the money where it will have a chance to grow — and increasingly, that means looking outside the U.S. READ MORE
5 trends in VC funding for pre-seed startups
Silicon Valley’s image as a shiny, money-spewing beacon on a hill of boundless opportunity has gotten a bit of a readjustment over the past year. The fundraising landscape has been utterly brutal. Yes, VCs are still sitting on a lot of dry powder, but as the entire economy shifts, many are nervous about where their next fund will come from.
It seems that we’re heading into a perfect storm, where more and more VCs are moving downstream, investing in slightly later-stage startups with less risk. READ MORE
Many Of 2021’s IPOs Have Flopped. What Does That Mean For 2023’s Hopefuls?
Close to half of the 171 companies that went public in 2021 at billion-dollar-plus valuations and are still trading are now worth less than $500 million. Just 40% of 2021’s IPOs are worth more than $1 billion.
The figures, from an analysis of The Crunchbase Billion-Dollar Exits Board, reveal that even as the IPO markets show signs of life, startups eyeing a public-market debut will face intense headwinds. READ MORE