Small Business Administration and Department of Defense Launch Small Business Investment Company Critical Technologies Initiative

On September 29, 2023, the U.S. Small Business Administration (SBA) and the Department of Defense (DoD) announced the rollout of the Small Business Investment Company Critical Technology (SBICCT) Initiative, a joint effort between the SBA and the DoD to increase private capital investment in critical technologies vital to U.S. national security interests. READ MORE

Venture Capital Founder: AI Bubble Will ‘Pop’ but Tech Will Persist

Is the artificial intelligence (AI) bubble set to burst soon?

It will likely happen in the next year, Yanev Suissa, the founder of venture capital firm SineWave Ventures, told Seeking Alpha in an interview published Saturday (Oct. 14). Still, that doesn’t mean the technology isn’t worthwhile, he added.

“AI is the next revolution in tech, but it’s also been around forever,” Suissa said. “It’s one of those things that’s going to pop and it’ll be a huge pop. And then it’ll sort itself out, right?” READ MORE

California Introduces New Diversity Disclosure Obligations for Venture Capital Companies

On October 8, 2023, in an effort to improve the diversity of venture capital investment in the state, California Governor Gavin Newsom signed Senate Bill No. 54 (SB 54) into law. SB 54 requires venture capital companies (VCC) to collect and report information about their funding determinations, including demographic information for the founding teams of each VCC’s portfolio companies, to the state’s Civil Rights Department (CRD). READ MORE

Climate tech startups get growing share of muted global venture capital

Investment and grants in climate tech startups have fallen just over 40% over the last 12 months, but that plunge is less precipitous than the broader venture capital industry globally, analysts at PwC said in a report released on Tuesday.

The report on the state of climate tech described investors as narrowing their focus to areas that need it most, such as heavy industries; climate tech has a "growing share of a muted market" hobbled by global economic and political conditions. READ MORE

Generalist Or Specialist? Deciding What Type Of Investor Is Right For Your Startup

Your startup is gaining momentum and you’re ready to raise capital to scale.

Great, but from whom?

Not all capital is created equal and choosing the right investment partner could be critical to your next phase of growth. Chances are you’ve started to compile a list of well-known VCs to target, but how do you evaluate the investors to determine who would be the best fit? READ MORE

Average U.S. venture capital exit value grows in third quarter

The third quarter's average U.S. venture capital exit value was $166 million, according to data from PitchBook and the National Venture Capital Association. It has been less than $100 million for six straight quarters and was $26 million in the second quarter. A year ago, it was $55 million. Looking back to 2012, average exit values peaked in the second quarter of 2021 at $559 million. READ MORE

How Generative A.I. Is Changing This VC's Investment Decisions

Linus Liang loves working with founders to build companies from the ground up. After eight years at venture capital firm Signia, Liang set out on his own this year, co-founding Kyber Knight Capital, a San Francisco-based firm that invests in early-stage tech companies, particularly those in artificial intelligence, e-commerce, and media. Kyber Knight's inaugural $120 million fund launched in June, with limited partners including former eBay and HP CEO Meg Whitman and former Walt Disney chairman and CEO Michael Eisner.

With his new fund, Liang's investment strategy has radically shifted in response to the boom in artificial intelligence startups, which he calls "the most exciting opportunity we've seen in a decade." READ MORE

Regardless of SBF Verdict, Crypto And Venture Have Significantly Changed

Sam Bankman-Fried’s trial kicked off this week in a Manhattan federal courthouse. The disgraced crypto wunderkind faces seven counts involving fraud and conspiracy charges related to the implosion of crypto exchange FTX.

The spectacularly colossal nature of SBF’s downfall has impacted not only the crypto startups and venture funding in the sector, but also venture capital in general. READ MORE

The Coming Wave of Startup M&A

To say it has been a tough time to be a startup founder over the past two years is an understatement. We all know that venture capital funding has been down, valuations are down, interest rates are up, and the predicted merger boom has yet to materialize (although deals are still happening). Throughout the summer, there were many news stories about a purported wave of startup shutdowns that have resulted from the economic rollercoaster we have been on, warning those numbers could increase as we move into late 2023. READ MORE

Global Venture Funding In Q3 2023 Falls Again Despite Late-Stage Rebound Led By Huge AI Deals

Global venture funding in the third quarter of 2023 reached $73 billion — up a bit quarter over quarter and down 15% from the $86 billion invested in Q3 2022, Crunchbase data shows. 

Despite the uptick quarter over quarter, this is the second lowest quarter since funding started to slide in 2022. The startup world is now five to six quarters into the current funding decline, Crunchbase data shows.  READ MORE

How Private Equity Firms Can Protect ‘Treasure Trove’ From Digital Threats

Cybersecurity risks are omnipresent. September’s hack of MGM Resorts International and Caesars Entertainment showed just how vulnerable companies can be, no matter how large or small.

Institutional asset owners and asset managers, and private equity firms especially, are uniquely positioned to be victims of cyberattacks, with “treasure troves of sensitive information,” as one technology manager put it, there for the taking. Any cybersecurity incident can have drastic consequences for the firms, their portfolio companies and their sensitive information. READ MORE

U.S. venture capital exits revive while fundraising, deals still in doldrums

U.S. venture capital exit values appear to have staged a bit of a comeback in the third quarter, while fundraising and total transaction values faltered, PitchBook-National Venture Capital Association's U.S. Venture Monitor showed.

There was a total of $35.8 billion worth of exits in the third quarter, up from a combined $6.6 billion in the second quarter and an increase from $16.4 billion in the third quarter of 2022. However, there were fewer exit transactions in the third quarter (216) than in the second quarter (256) and the year-earlier quarter (298). READ MORE

Trends in Growth Equity Financing in an Uncertain Economy

The current economic climate has been challenging for privately held companies seeking to raise growth capital. Several factors have contributed to the recent contraction in fundraising, including high interest rates, reduced access to capital, a decline in valuation multiples, and an unfavorable outlook for exits.

Given this market environment, companies seeking to attract new capital have increasingly had to conduct down rounds, equity financings at lower company valuations than in prior rounds. Our Goodwin Deal Database indicates the percentage of down rounds has risen steadily for six quarters. READ MORE

Increasing Your Startup’s Chance Of Getting VC Funding In A Recession

Is a recession coming? While some sources predict that a recession is on the horizon and others say signs point to “no,” what we know for sure is that businesses are adapting to bear the brunt of economic changes, real or imagined. Businesses are feeling the effects of fear, even while inflation is dropping and the stock market is rising.

Despite some healthy economic indicators, venture capitalists are still wary about allocating funds, because there is no telling what the future holds. With fewer VCs providing funding, fewer startups will be able to take their first mass-market breath. READ MORE

We are liars, hypocrites and egoists. We are VCs

A nice pair of sneakers, Brunello Cucinelli vest, an expensive car and a cry for help in their eyes — that's how I'd describe a typical venture capitalist on their path to becoming a partner one day.

In public, we position ourselves as superheroes supporting world-changing startups. In reality, it's a male-dominated, materialistic culture marked by burnout and cynicism. 

We have only ourselves to blame for the misery we suffer and spread. We are sinners, and here are our gravest sins. READ MORE