5 Trends Steering Venture Capital In 2024

While some analysts might call the current state of the venture capital industry a winter, there is still a warm investment climate for startups and established businesses. Even if your business isn't on the same scale as OpenAI—setting the tone for the AI industry and securing a reported $10 billion funding round from Microsoft—the funding opportunities are still abundant.

At all times, investment firms and VCs have resources to support innovators and cutting-edge technological novelties. Based on what I'm seeing in the industry, they're now looking for businesses that show promise for predictable growth and liquidity and align with current VC trends. READ MORE

Embracing Change And Venturing Into VC

Thanks to online retailers and the magnetic draw of unlimited two-day shipping, convenience stores have never felt less convenient.

It felt like an overnight shift from our usual way of swinging by the drugstore to an easy press of the button (or set to auto-ship) to get us what we need as quickly as we need it. Before these online retailers rose to prominence, convenience was a term we held quite loosely. But suddenly we have discovered a new need and an entirely new meaning of convenience. READ MORE

Investors won’t give you the real reason they are passing on your startup

When an investor passes on you, they will not tell you the real reason,” said Tom Blomfield, group partner at Y Combinator. “At seed stage, frankly, no one knows what’s going to fucking happen. The future is so uncertain. All they’re judging is the perceived quality of the founder. When they pass, what they’re thinking in their head is that this person is not impressive enough. Not formidable. Not smart enough. Not hardworking enough. Whatever it is, ‘I am not convinced this person is a winner.’ And they will never say that to you, because you would get upset. And then you would never want to pitch them again.” READ MORE

IPO Market Insiders ‘Cautiously Optimistic’ That Current Trickle Will Get Stronger

With Microsoft-backed data security firm Rubrik set to enter the public market this week, talk about the rejuvenated IPO market has returned as many wonder who may be next, and when.

Rubrik is set to join the likes of chip startup Astera Labs, Walmart-backed Ibotta and online forum host Reddit as one of the bigger IPOs so far this year. Those IPOs came after last year’s second-half offerings by Arm Holdings, Instacart and Klaviyo helped thaw an IPO pipeline that had been frozen for nearly two years. READ MORE

The Mixed State Of Startup Funding In 2024

Startup investors kept a tight hold on their wallets in the first quarter of 2024, Crunchbase data shows. There were big exceptions — some AI, healthcare, energy and robotics startups, among others, received massive investments — but overall the tone was cautious as the year got started.

To break it down further, let’s look at 11 charts based on recent Crunchbase data that show the state of the startup world in early 2024. READ MORE

New Funds Target Out-Of-Favor Startup Sectors

Startups in sectors that saw steep funding declines may be getting fresh attention from investors, courtesy of new industry-focused funds that closed this year.

In areas from consumer products to apps to gaming, U.S. venture firms have raised fresh capital to invest in industries where funding levels remain drastically below peak. This, along with a modest uptick in first-quarter venture investment, indicates some sectors may have hit a cyclical low last year and should be heading higher. READ MORE

How To Catch A Unicorn In The Ed Tech Industry

In the world of venture capital and business start-ups, the greatest measure of success is a company that is valued at more than $1 billion and earns over $100 million annually. These businesses are called “unicorns,” and according to the analytics firm CB Insights there are more than 1,200 such companies operating in the U.S. today, over 500 of which were created in the past decade. So why is it that despite significant financial backing over the same decade – via venture capital and government funding – very few educational technology companies have reached unicorn status? Let me count the ways. READ MORE

Private equity’s latest trade: The financial futures of millions of retirees

A brisk new trade in the financial futures of millions of retirees is unnerving some US workers, regulators, and politicians who worry that private equity firms will invest corporate pensions recklessly.

Recent lawsuits challenging AT&T, Lockheed, and Alcoa’s plans to turn their pensions over to Athene, which is owned by Apollo, casts a broader spotlight on private equity’s push into new corners of finance. Sen. Sherrod Brown has held hearings, cheered on by the Teamsters, and the Labor Department is weighing whether to require companies to at least consider whether an insurance business is owned by private equity before turning over their pensions. READ MORE

The inequity method of accounting

The fundamental bargain of M&A seems pretty simple. At the closing of a deal, the buyer pays the seller, and gets a business in return.

It hasn’t been so straightforward for the family who agreed in 2022 to sell its California supermarket Save Mart to the private equity firm Kingswood Capital Management, which valued the grocery chain at $245mn. READ MORE

How Can VCs Create Community At A Time Of Division?

Today’s social divisions are as palpable as ever, and on the receiving end are often people from marginalized communities, immigrants and refugees.

As investors, we know many founders who have recently arrived to the U.S. from countries suffering humanitarian crises, or whose teams are stuck in war zones. The challenges they face in everyday life — let alone finding success as an entrepreneur — are unimaginable to many. READ MORE

Make Decisions with a VC Mindset

Venture investors are the hidden hand behind the most innovative companies surrounding us. According to research conducted by one of us (Ilya), venture capitalists were causally responsible for the launch of one-fifth of the 300 largest U.S. public companies in existence today. They have played an essential role in unlocking the power of the internet, the mobile revolution, and now artificial intelligence in all its forms. Apple, Google, Moderna, Netflix, Airbnb, OpenAI, Salesforce, Tesla, Uber, and Zoom—these firms disrupted entire industries despite initially having fewer resources and less support and experience than their mature, successful, cash-rich competitors. All these businesses could theoretically have emerged from within an established company—but they didn’t. Instead, they were financed and shaped by VCs. Indeed, we estimate that three-quarters of the largest U.S. companies founded in the past 50 years would not have existed or achieved their current scale without VC support. READ MORE

The Data-Driven Investor Of Today And Tomorrow

The term "data-driven investor" might sound pedestrian—it’s hard to point to an industry that hasn’t become more data-driven over the past two decades. But in recent years, the private capital industry’s adoption of data-driven insights represents a very real and material shift in how firms are now operating.

As a proxy, one can look at the hedge fund industry for a historic example of this strategic shift. Up until the 1980s, hedge funds were mostly run by Wall Street veterans who used their intuition and connections to make investment decisions. But as more data became available, a new breed of funds emerged that combined quantitative models with human judgment to drive better decisions and reduce cognitive biases. Venture capital and private equity are at a similar inflection point right now. READ MORE