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While Kansas City and San Francisco may be a good football matchup Sunday, it assuredly is not when it comes to the amount of venture capital both areas see.
The City By the Bay has been a marquee venture market since venture capital became a thing.
On the other hand, when it comes to venture, Kansas City has, well, good barbecue. READ MORE
Taking over as CEO from a founder is often a herculean task, especially when you’re succeeding founders who have invested their money, time, passion and life into the business.
Even if appointed, taking on this role comes with a set of inevitable challenges. Founders naturally have the highest percentage of ownership and sway over the business to date. READ MORE
Global deal activity, encompassing venture capital (VC) funding, remained subdued in 2023. Key markets such as the US, China, India and the UK also registered a decline in VC funding deal volume and value. However, despite suffering setbacks, the US continued to account for the highest share of high value* VC deals in 2023 followed by China. These two countries collectively accounted for 70% of the total number of high value VC deals announced globally in 2023, reveals GlobalData, publishers of RBI.
Aurojyoti Bose, Lead Analyst at GlobalData, said: “Although there was a dent in investor sentiment globally owing to macroeconomic challenges, inflation, interest hikes, ongoing conflict and geopolitical tensions, countries with conducive startup ecosystems such as the US continue to remain attractive investment destinations. VC firms have become cautious but not averse to placing big bets in promising startups from these countries.” READ MORE
Of all the problems that have besieged venture capital in recent years, arguably none is more acute than investors’ difficulties converting their paper returns into cash.
Limited partners are disappointed with how much capital is coming back to them from their venture managers. And they’re less inclined to re-up with VCs that haven’t returned much cash. LPs are closely monitoring a metric called distributed to paid-in capital (DPI), which measures how much capital a manager returned relative to what was invested.
But just how small are recent cash distributions compared to historical levels? READ MORE
At least five U.S. venture capital firms have been accused of funding blacklisted Chinese artificial intelligence and semiconductor companies that allegedly aid the Chinese Communist Party in mainland surveillance and oppression operations, according to a new report from the House select committee on China.
GGV Capital, GSR Ventures, Qualcomm Ventures, Sequoia Capital China, and Walden International reportedly funneled more than $1.9 billion to Chinese AI companies and $1.2 billion to China’s chip supply chain, the investigation found. READ MORE
After a long positive run, venture capital enters 2024 buffeted by crosswinds.
The market has become choppier due to global pandemic aftershocks, including supply chain disruption, rising inflation, and workplace and productivity changes from remote work adoption.
Though the U.S. economy appears to be headed for a "soft landing," where restrictive monetary policy slows inflation and job growth without leading to unemployment spikes, the belt-tightening steps businesses took in anticipation of a widely predicted recession are squeezing the venture capital industry. READ MORE
The world of business investment can be fraught with peril. To the general public, the concept of private equity still brings to mind visions of corporate raiders, and venture capital (VC) might be seen as a pure profit enterprise (PE).
Those inside this world know that these perceptions are inaccurate and even insulting. Corporate investment, whether in the form of PE or VC, carries an immense amount of risk for all involved. Too many investments that don’t work out can forever change the fate of a PE or VC firm. READ MORE
Indeed, firm founder Aydin Senkut — who spent a handful of years at Google as a product manager in its earlier days — was born in Turkey and talks often of the hustle he sees in founders around the world. READ MORE
2023 was the worst year in a decade for acquisitions of VC-backed companies. And while buyers were broadly picky, they were much more likely to snap up younger startups—a byproduct of a market that now entices founders to sell early.
Corporate acquirers scooped up 151 seed-stage startups last year in the US, according to the latest PitchBook-NVCA Venture Monitor. That count was the lowest since 2017, but M&A of more mature companies fared much worse: Acquisitions of Series A and later-stage companies have all fallen to a 10-year low. READ MORE
Private equity's share of global M&A deals featuring an earnout provision rose last year to its highest level since 2020 as fund managers leaned on deferred payments to close transactions in a challenging dealmaking environment.
The value of all announced M&A deals with earnouts totaled $73.11 billion globally in 2023, falling 34.2% from $111.06 billion in 2022 as overall M&A activity slowed in 2023, according to S&P Global Market Intelligence data. Private equity- and venture capital-backed deals accounted for 26.5% of the 2023 total, up from 17.3% in 2022. READ MORE
In 2023, private capital pooled funds continued to be an excellent vehicle for investors to invest in different asset classes while allowing for diversity of investments. Last year, fund sponsors continued to raise large amounts of cash to deploy. The industry is expecting growth over the coming years in each of the major asset classes, with Preqin estimating that US$24.5-trillion will be invested in the alternative industry by 2028. Below, we’ve highlighted some of the most significant developments in private capital funds in 2023 READ MORE
Last year saw the lowest level of startup funding in five years, witnessed valuations fall drastically, and offered little hope for IPO contenders. But is that all now in the rearview mirror?
That’s certainly the hope from many of the startup investors and entrepreneurs we’ve spoken with recently, who say that even if things don’t come roaring back in 2024, they’re at least looking forward to a year of relative calm and predictability. READ MORE
Suppressed valuations and an uptick in private credit financing could fuel a wave of take-privates in 2024. But such deals face headwinds nonetheless.
By historical standards, 2023 was a strong year for private equity-led take-privates. Although activity didn’t reach the highs of 2021 and 2022—when global deal value totaled $259 billion and $301 billion, respectively—there was still $170 billion invested across 133 take-privates. READ MORE
The first article, opens new tab in this two-part series (“The times for private equity and venture capital transactions are a-changin’: 2024 challenges,” Reuters, Dec. 19, 2023,) explored the impact of the Corporate Transparency Act's new reporting requirements and increased antitrust enforcement by the Federal Trade Commission (FTC) and U.S. Department of Justice on private equity (PE) and venture capital (VC) funds. Read on for more key items that should be on the radar of PE and VC funds and their portfolio companies for 2024 and beyond, including changes in the law relating to enforceability of restrictive covenants and legal issues surrounding artificial intelligence. READ MORE
Nearly two years after first proposing new rules related to special purpose acquisition companies (SPACs), the U.S. Securities and Exchange Commission (SEC) has adopted final rules aimed at enhancing investor protections in initial public offerings by SPACs and in subsequent de-SPAC transactions. The final rules require new enhanced disclosure requirements related to SPACs, and include new procedural protections in de-SPAC transactions. The SEC also provided guidance regarding underwriter status in de-SPAC transactions and analysis of a SPAC's potential status as an investment company under the Investment Company Act. READ MORE
A provision in the tax code is threatening hundreds of early-stage, research-intensive firms. Fortunately, Congress finally seems prepared to fix the problem. But lawmakers will have to act quickly to save startups like mine.
The dilemma stems from a seemingly innocuous provision in the 2017 Tax Cuts and Jobs Act, which, among many other things, adjusted Section 174 of the tax code. Previously, that section allowed businesses to deduct the full cost of their research and development (R&D) expenses in a single year. READ MORE
IPOs generate a lot of buzz. Acquisitions by private equity firms, not so much.
After all, most founders don’t start out with the vision of selling their startup to a leveraged institutional buyer looking to profitably offload it again in a few years. It arguably lacks the narrative appeal of, say, a sale to a tech giant or a smash public debut. READ MORE
Private equity and other illiquid private market investment funds have become increasingly relevant to pension fund investors in recent years as they have sought to diversify a minority proportion of their portfolios away from public market securities. Some pension funds may now find that they are over allocated to private funds because of declining values in public markets. Private fund valuations have held up better than valuations in the public markets with the result that some investors have found themselves holding a greater proportion of private investments than they intended. READ MORE
What if, as a startup founder, you got an unbridled window into the mindset of a venture capitalist who could set your dreams in motion or politely show you the exit? Absent a certain level of clairvoyance, this might be a pipedream.
But there are ways to simulate the process of pitching, raising and deploying capital that might prove instructional for when you eventually get your foot in the door. It starts with a computer game. READ MORE