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For the past handful of years, the venture market has been on a wild ride. From the cheap money days of 2020 and 2021 to the market recalibration in 2022 to some rocky times in 2023, the private market has had its ups and downs.
However, venture capitalists view 2024 pretty optimistically — although with caveats — with funding likely already hitting its low, the exit markets coming back, and a coming to terms with the new normal of work. READ MORE
Special purpose acquisition companies (“SPACs”) have been in the litigation spotlight recently. As SPAC disputes play out in courts nationwide, one especially interesting field of play is in the Delaware Chancery courts where SPAC shareholders are pursuing breach of fiduciary duty cases against SPAC sponsors, officers, and directors. How did this litigation develop, and where does it stand now? READ MORE
When people give you advice about how to run your business or, let's be real here, how to run your life, you'll hear a lot about the importance of failure. And don't get me wrong, I understand how large a part failure plays in the poorly-written instruction manual for success.
The problem is that these folks almost always say the out-loud part too quietly, or not at all. That advice winds up sounding like a quote from one of my favorite obscure movies, a quote about how to succeed that I can take completely out of context, and it still works as intended READ MORE
The Securities and Exchange Commission’s private fund advisor rule, which went into effect in August, is driving a rift between the industry groups that represent private equity firms and those that speak on behalf of their clients.
Late in December, the Institutional Limited Partners Association, several industry groups, and 11 state pension plans, filed an amicus brief in support of the private fund advisor rule, which is being challenged by trade associations that represent private equity firms. The brief was filed in the United States Court of Appeals for the Fifth Circuit Court. READ MORE
For the first nine months of 2023, there were 39 private equity secondary funds that raised $68.1 billion, according to data compiled by PitchBook Data. The dollar figure eclipsed most annual totals since 2008, with 2020 as an exception. READ MORE
Readers of Antoine De Saint-Exupery’s The Little Prince may recall the hatlike appearance of the snake that swallowed an elephant. After the festive season, some may empathise with that swollen reptile. The private equity industry has ended 2023 in something of a similar state. Private equity companies have struggled to find buyers for their portfolio companies for a number of years now. Companies have had their hands full managing snarled-up supply chains and rampant inflation. Opportunities for successful initial public offerings are few and far between. High valuations for private equity portfolio companies have not helped. READ MORE
In the fast-paced world of venture capital, investment opportunities in generative AI companies have become increasingly appealing. These companies, leveraging cutting-edge technology, are driving innovation across industries such as healthcare, finance, media and entertainment. However, venture capitalists face unique challenges when analyzing and evaluating such companies due to the complex nature of generative AI. This article explains the intricacies of the evaluation process, exploring the technical details, tools, and regulations that VCs employ to make informed investment decisions. READ MORE
Everyone knows how Amazon AMZN -1% started as a simple book store or how Meta began in a dorm room. At some point all of today’s great companies were just a passion project, a great idea in need of capital, employees, and the first real customer. While some ideas grow to become companies organically without outside investors, most companies need help. They need capital, they need expertise, they need connections and support. READ MORE
Prof. Ilya Strebulaev of Stanford University points out the contributions of VCs by noting that they were financiers of some giant VC-backed “startups” of the last 50 years.
But, in VC as in life, what you see may not always be what you get. READ MORE
Many owners of privately held, middle market companies wonder about potential exit options, including the sale of their companies. Particularly in times of volatility, it's common to think about timing: "Can I weather another cyclical downturn? Are acquirers actively purchasing companies? Is the current market favoring buyers or sellers?" READ MORE
As we look ahead to 2024, the venture capital industry appears to be approaching a critical juncture, shaped by recent stumbles and an uncertain macroeconomic environment. High-profile turnovers at leading firms like Sequoia Capital and Tiger Global, alongside a general slowdown in dealmaking, have marked a challenging year. While some view these developments as a healthy market correction, questions remain about the industry’s trajectory. READ MORE
Equity crowdfunding, or raising funds from both unaccredited and accredited investors, can be a great alternative to venture capital for startups. The strategy has become significantly more popular in recent years now that venture capital is harder to come by, and changes in regulations allow companies to raise more money at one time.
But even though crowdfunding is growing in prominence and offers a whole host of benefits to the startups that choose it, many VCs continue to talk negatively about the strategy. Many traditional investors feel equity crowdfunding is only for startups that can’t raise venture money. And they even deem capital raised this way as just cash that lacks the value an investor brings, be it their network that can help with hiring and connections to customers, or their own mentorship and experience. READ MORE
In the world of entrepreneurship, the age-old debate rages on: To bootstrap or not to bootstrap? While the allure of venture capital may seem irresistible, there’s something to be said about the grit and determination that comes with building your empire from the ground up. Nowadays, venture capital is overhyped, with entrepreneurs jumping at the idea of selling equity in their business for quick cash. READ MORE
The 2024 Private Equity and Venture Capital Compensation Report marks the tenth straight year of compensation gains in the private equity and venture capital industry. But the market is changing.
The Private Equity Compensation Report reveals that 2023 brought increases across the board. Regardless of job title, all respondents reported an increase in total compensation. READ MORE
Between the rapid ascendance of AI and the often dramatic downfall of startups large and small, 2023 was an action-packed year for tech and venture.
In many ways, we expect 2024 to be the year when things settle down a bit. The buzz around AI will likely wane, but so, hopefully, will layoffs. The IPO markets may make a tepid comeback and we expect that after nearly two years of falling funding, venture investment will level off. READ MORE
The September public debuts of Arm, Klaviyo and Instacart signaled the public markets could be opening up again. After all, these were the largest tech IPOs in more than 18 months.
However, since these debuts, zero venture-backed companies in the U.S. markets have listed above a billion dollars. And Klaviyo and Instacart are down from their IPO price by 22% and 33%, respectively, as of Dec. 31, 2023, around three months since going public. READ MORE
So perhaps it’s no surprise that investments by leading investors in unicorn companies have dropped precipitously in 2023.
For this analysis, we look at the nine most active venture and growth investors globally who have racked up the most investments in unicorn companies since 2018.
We found that investments are mostly in the single digits this year for the most active investors in this asset class. READ MORE
In 2023, private equity firms continued to integrate ESG considerations into their investment processes with Limited partners (LPs) and regulators continued to prioritise the importance of transparency and reporting related to ESG factors.
Whether the ESG acronym continues to be used over the long term remains to be seen but ESG in one form or another has cemented itself into the private equity landscape. READ MORE
Have things gone from bad to worse for startups in 2023?
If you look at the deal values, deal counts and valuations of the most prominent sectors in the VC ecosystem and compare the results to 2022—which was itself a weak year relative to 2021 highs—it will certainly feel that way. READ MORE
After a painful year, venture capitalists are feeling upbeat about fundraising in 2024. But they are less confident about the exit options available to their portfolio companies next year.
Strong deal volume and valuations led to stratospheric fundraising in recent years. In 2021, 1,397 U.S.-based venture funds raised $157.8 billion and in 2022, 1,057 funds brought in $168.3 billion (more than twice the number of funds and more than four times the capital raised 10 years ago), according to PitchBook. Those totals dramatically slumped this year under the pressure of higher interest rates and a slower economy. Halfway through 2023, just 197 funds raised $27.6 billion. The biggest venture capital funds are having an especially tough time raising capital and investing it. READ MORE
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