Microsoft, Nvidia Lead In Investing In AI Startups, But Others Close Behind

Just last week it was reported chip giant Nvidia, Salesforce Ventures  and Cisco all participated in a $450 million investment for Toronto-based AI startup Cohere. That same day, Cisco and its investment arm — Cisco Investments — made news when it launched a $1 billion AI investment fund.

Those noteworthy machinations by some of the biggest names in tech are just the latest examples of these corporate giants’ desires to at best be leaders in the generative AI sector — and at worst not fall behind. READ MORE

There are risks lurking in the world of private capital

New Orleans is (in)famous for being a party town that seems to inhabit a parallel universe — what happens on Bourbon Street usually stays there, however wild. Not so, however, in America’s fast-expanding private capital world. On Wednesday, the New Orleans-based Fifth Circuit US Court of Appeals ruled in favour of six private equity and hedge fund groups to toss out a transparency rule introduced last year by Securities and Exchange Commission. This had required private equity, hedge fund and real estate groups to start issuing quarterly performance and fee reports, perform annual audits, and to stop giving some investors preferential treatment over redemptions and special access to portfolio holdings. READ MORE

Private Equity Titans’ Nerves on Edge at Lavish Industry Party

Outside the chandelier-laden function rooms, away from the cameras and far from the stuffy booths in the main conference halls, the giants of private equity were getting honest with each other. READ MORE

Private equity bosses warn of lower returns

Private equity executives have warned that their industry faces the prospect of years of lower returns as they seek to sell assets following a frenzy of investments during the coronavirus pandemic. After booming in recent years and raising record hauls of cash, buyout groups face a challenge in exiting from trillions of dollars worth of unsold companies. Many of those deals were agreed during the 2021 to 2022 window of low interest rates and buoyant markets. READ MORE

How Startup Investments Help Corporations Accelerate Their Growth

In my experience, corporations often struggle to be more innovative and get ahead in the marketplace. They often develop their own research and development organizations, which are intended to develop new product and technology ideas.

However, such traditional approaches are typically not fast enough to stay ahead of industry trends. Corporations also collaborate with top universities to develop new technologies, but such research partnerships usually move slowly. READ MORE

The Portion Of US VC Funding That Went To Female Founders Hit A New Peak In 2023, Thanks To Massive AI Deals

In 2023, the proportion of U.S. venture funding that went to startups with at least one female co-founder reached a new peak. In fact, a quarter of all funding — $34.7 billion — was invested in companies with at least one female founder, Crunchbase data shows.

The uptick in the portion of startup investment going to female-founded companies — up from 15% in 2022 — was in large part due to a number of billion-dollar-plus rounds raised by AI companies with a female co-founder. READ MORE

In 2024, many Y Combinator startups only want tiny seed rounds — but there’s a catch

When Bowery Capital general partner Loren Straub started talking to a startup from the latest Y Combinator accelerator batch a few months ago, she thought it was strange that the company didn’t have a lead investor for the round it was raising. Even stranger, the founders didn’t seem to be looking for one.

She thought it was an anomaly until she talked to about nine other startups, Straub told TechCrunch. They were all looking to raise nearly identical rounds: $1.5 million to $2 million with around a $15 million post-money valuation, while giving up only 10% of their companies — aside from YC’s standard deal, where it takes a 7% stake. Most had raised the majority of that already from multiple angels with only a few hundred thousand dollars’ worth of shares left to sell. READ MORE

Eleventh Circuit Invalidates Contest Providing Venture-Capital Funding for Black Women

The U.S. Court of Appeals for the Eleventh Circuit held that a contest providing venture-capital funding only to Black female applicants is substantially likely to violate section 1981 of the Civil Rights Act of 1866, which prohibits race discrimination in the making of contracts. The 2-1 split decision in American Alliance for Equal Rights v. Fearless Fund Management, LLC (No. 23-13138, June 3, 2024) held that an organization devoted to “ending racial classifications and racial preferences in America” was substantially likely to prevail on its § 1981 claim to enjoin the restricted contest, and it remanded the case for entry of a preliminary injunction. READ MORE

13% of VC firms aren’t planning to raise another fund

Thirteen percent of venture GPs don’t plan to raise another fund as the LP pullback spoils fundraising efforts, according to PitchBook’s semiannual VC Tech Survey. That’s double the rate in H1 2023, when 6% said they had no plans to raise another fund.

Nearly half of venture firms—44% of those surveyed in mid-2023—had previously pushed back their plans to re-enter the fundraising process, as institutional investors became increasingly concerned with overexposure to the asset class. READ MORE

How to get a job in private equity

Private equity is a vast industry covering a range of investment firms from global companies like Blackstone, KKR, and The Carlyle Group to hundreds of smaller players that specialize by geography or sector such as Vitruvian Partners, Sovereign Capital Partners, or Bridgepoint Group. The biggest firms tend to operate beyond just private equity and invest in asset classes like real estate and private credit as well.  READ MORE

Will Europe Ever Match The U.S. For Startup Investment And Growth?

“Europe is less hard-working, less ambitious, more regulated, and more risk-averse than the US, with the gap between the two continents only getting wider.” Those were the words of Nicolai Tangen, the boss of Norway’s $1.6tn Norges Bank Investment Management (The Petroleum fund), in an interview with the Financial Times in April. As one of the largest single investors in the world, with increasing holdings in the US compared to Europe, Tangen’s views matter. But is he right, and what does it mean for Europe’s startups? READ MORE

Searching for Momentum: Private Equity Midyear Report 2024

Has private equity dealmaking finally bottomed out?

Based on data through May 15, the answer would be a tentative yes—though we’ve yet to see anything resembling a “normal” pace of investments and exits. READ MORE

VC funds take a shine to new gen’s D2C brands

Several direct-to-consumer (D2C) brands in sectors such as food and beverages, apparel, health and wellness — founded by scions of families running traditional businesses in similar categories — are drawing

These entrepreneurs with their inherent understanding of the business and deep-rooted connections in the supply chain ecosystems are best placed to launch modern avatars of legacy businesses, according to investors backing them. READ MORE

VCs are selling shares of hot AI companies like Anthropic and xAI to small investors in a wild SPV market

VCs are clamoring to invest in hot AI companies, and willing to pay exorbitant share prices for coveted spots on their cap tables. Even so, most aren’t able to get into such deals at all. Yet small, unknown investors, including family offices and high-net-worth individuals, have found their own way to get shares of the hottest private startups like Anthropic, Groq, OpenAI, Perplexity, and Elon Musk’s X.ai (the maker of Grok). READ MORE

Why Are Exits A Perennial Problem For VCs?

Venture capital firms (VCs) suffer with exits more than private equity (PE). Traditional wisdom suggests that they invest earlier in the life cycle and have to wait longer for the exit. Is this the real reason?

The past two years have been challenging for distributions for both VCs and PEs, especially the former hitting a 14-year low of 5% in distributions as a percentage of net asset value. Average distributions to paid-in capital (DPI) for VC funds launched in 2018 stand at a meager 0.3 times for both EU and U.S. managers, while DPI for funds launched in 2013 is at 1.1 times and 1.8 times, respectively. READ MORE

Main Risks And Opportunities For Venture Investors

Emerging markets provide numerous options for venture investors seeking development and variety. These countries have a large population of young, middle-class customers, propelling their marketplaces to grow faster than developed ones.

My experience as an investor has shown that the choice of investment focus depends on the geographic market. The LATAM, MENA (the Middle East and North Africa) and SEA (Southeast Asia) regions seem to be the most attractive. There, projects can receive an additional boost factor due to the market’s rapid growth. READ MORE

What are the top trends in private equity?

In the ever-evolving landscape of private equity, one term has consistently captured the attention of investors and analysts alike: dry powder.

This financial jargon, referring to the capital that private equity firms have raised but not yet invested, has seen a remarkable surge in recent years. READ MORE

Higher rates have changed the game for private equity

Private equity is under pressure. Higher interest rates and a still sluggish new listings markets have made it harder to sell holdings and return cash to investors. That in turn has made it more difficult to raise new funds because pension funds, endowments and family offices have less money to allocate and a growing array of other options. READ MORE

Private equity and mismanagement: Here’s what really killed Red Lobster

There are lots of stories you can tell about why Red Lobster declared bankruptcy this week. You can point to the impact of the COVID pandemic, which put a dent in the full-service dining market that Red Lobster never recovered from. (According to its bankruptcy filing, Red Lobster’s guest count is down 30% from 2019.) You can cite the impact of inflation and higher wages for restaurant workers, which has raised the cost of dining out and made cheaper fast-casual restaurants more appealing to consumers. And you can enumerate the chain’s marketing missteps, including its introduction of the now-infamous Ultimate Endless Shrimp for $20 promotion in May 2023, which cost Red Lobster $11 million in losses in less than a year. But the biggest reason Red Lobster went under is pretty simple: Its owners sank it.  READ MORE

The Goldilocks Scenario Every VC Is Hoping For

Over the past few years, we’ve witnessed the meteoric top of the venture and startup markets where valuations were through the roof, investors were competing with each other on speed (instead of due diligence), founders were exclusively focused on raising the next round, and startups had an almost unlimited source of capital to pursue growth at all costs.

Those days ended with a series of significant blows to the ecosystem including the Silicon Valley Bank collapse, global wars and rising interest rates. READ MORE