With private equity deals under harsh scrutiny from the Department of Justice, it is critical that sponsors follow appropriately structured pre and post-acquisition best practices to avoid enforcement exposure and best position their assets for exit sale. After a decade of successive policy announcements, the DOJ has at long last provided real opportunities for private equity sponsors buying or selling companies in regulated industries to protect themselves and their portfolio companies against criminal or civil penalties and protect the value of their assets. READ MORE
JPMorgan Chase Says Private-Equity Backed IPO Market Is Favorable
A top banker at JPMorgan Chase said that the initial public offering (IPO) market for companies backed by private equity firms is heating up.
Keith Canton, JPMorgan’s head of Americas equity capital markets, said the market for such companies is “very much open,” as firms seek to lower their debt loads or provide existing investors an opportunity to cash in, Bloomberg reported Wednesday (Oct. 2).
“The deals pricing in the next 10-15 days are largely sponsor-backed assets,” he said in a Tuesday interview with Bloomberg. “That gives us a higher degree of confidence for volumes next year just given the number of high-quality assets that sit within sponsor portfolios.” READ MORE
NATO takes the plunge into the world of venture capital
The NATO Innovation Fund, the “world's first multi-sovereign venture capital fund,” made its first investments earlier this summer in deep tech companies including British aerospace manufacturing company Space Forge and AI companies ARX Robotics and Fractile.
Modeled like the U.S. intelligence community’s venture capital arm IQT (In-Q-Tel), the fund’s intention is to focus on spurring innovation in areas including biotechnology, AI, space tech, and advanced communications. READ MORE
OpenAI valuation surpasses every VC-backed IPO
OpenAI wrapped up its $6.6 billion financing at a $157 billion valuation—a remarkable achievement that raises the stakes for CEO and founder Sam Altman to build on the lofty price tag for an eventual IPO.
The San Francisco-based company is now worth far more than any VC-backed company at the time of their IPO—including Meta, Uber, Rivian and Coinbase, according to an analysis of PitchBook data. READ MORE
The pertinence of VC secondaries
Following the 2008 financial crisis, underperforming PE general partners (GP) found themselves in a pickle. Their portfolio was underperforming and their limited partners (LP) were nervous about their return on investment. This made it difficult for GPs to raise money.
Some came up with an idea: carve out their portfolio’s best performers into a new fund, a “continuation” fund, while selling the rest of the portfolio. Those sales returned some money to LPs. They could then either buy into the new continuation fund or call it a day. The GP, armed with a sexier fund and a sexier pitch, could also hunt for new LPs. READ MORE
VC Math Explained To Founders: The High-Stakes Game Of Startup Funding
Why should you care about VC math as a startup founder? Well, because you should know who you’re getting into business with and their incentives which explain a lot of their actions... Alright, let's dive real deep into the VC world. Grab your scuba gear, because we're going all the way down! READ MORE
A Venture Capital Firm Does Something Rare: Give Money Back
Venture capital firms raise money — lots of it — and invest it in start-ups in hopes of generating big returns. One thing they rarely do is give the money back.
Yet that is what CRV, one of the industry’s oldest firms, is planning. The firm will tell its investors this week that it will return the $275 million that it has not yet invested from its $500 million Select fund, which is designed to back more mature start-ups. READ MORE
Private Equity Calls in Experts to Fix Firms They Can’t Sell
Buyout heavyweights are increasingly resorting to the old-fashioned way of making money — actually running the companies they’ve bought.
Financial engineering just isn’t working as well as it once did for private equity shops. Some of the biggest, including Goldman Sachs Group Inc. and Blackstone Inc., have added veterans with operations experience from industry giants like Walmart Inc. and Honeywell International Inc. Others like Brookfield Asset Management Ltd. and Partners Group are leaning even more into their roots as operators. READ MORE
Private Equity’s Data Transparency Revolution
Investment firms do not need to publish their performance for the general public and acquisitions can be completed without disclosing financial information about the transaction.
However, as private markets mature and become more widespread, the lack of clear and standardized data is proving to be a barrier to even wider adoption. Investors need better access to information on private fund performance, transactions, fundraising, valuations and benchmarks as more capital flows in. READ MORE
Private equity’s ‘layered leverage’ needs more scrutiny, says PGIM chief
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The chief executive of $1.3tn asset manager PGIM said he was concerned about the “layered leverage” that private equity firms are using to return cash to investors and urged regulators to insist on more transparency about complex forms of debt. David Hunt said that as private equity groups struggle to exit investments, they have been using more complex and opaque forms of borrowing, such as leveraging up funds that own several already-indebted companies to finance payouts for their investors. READ MORE
Newsom vetoes bill to let California ban private equity deals for health care
California Gov. Gavin Newsom on Saturday vetoed a bill that would have given his state the ability to block private equity acquisitions of most health-care facilities and service providers.
Why it matters: This likely kills the idea on a national level, where it was proposed by Sen. Ed Markey (D-Mass.) in response to the Steward debacle. READ MORE
Why Public Stock Offerings Make Sense for Some Startups
In today’s evolving landscape of startup funding and the tight capital market, public stock offerings (also known as equity crowdfunding rounds) are becoming an increasingly appealing option for many companies, even those that have reached a more mature stage. While venture capital (VC) remains a significant funding source, it’s not always the best fit for every business — for a variety of reasons.
For some startups, launching a public stock sale can provide a viable alternative to the traditional VC path, especially those with a community-driven customer base. When considering whether to embark on this route, it’s crucial to recognize that this particular flavor of raising capital requires a substantial commitment of time, resources, and energy — a factor that is often misunderstood or underestimated. READ MORE
How Can Firms Set Up A CVC Successfully?
As I discussed in my previous article, corporate venture capital units (CVCs) can be a great opportunity for both established firms and startups. By housing disruptive investments as separate entities, CVCs help insulate these ventures from the pressures of delivering near-term results so firms can stay focused on innovation.
I see the number of CVCs poised to grow, with more firms tapping into innovative technologies and a swathe of talents seeking to launch ventures of their own. So, what does it take to establish a CVC and, more importantly, ensure its success? READ MORE
What counting cards at blackjack can teach you about VC investing
Venture Capital (VC) can be a rewarding place you could invest your money. But nowadays, some are reconsidering whether to invest in VC as an asset class at all. A number of VCs have responded by “reducing risk” and slowing their investments. I’m a VC myself, and I first learned about high-pressure bets while playing blackjack. READ MORE
Longevity Startups Are Getting Funding, But Not As Fast As We’re Aging
We are all getting older. But never before have we been getting this much older.
In the U.S., at least one in six people is now over the age of 65. At the same time, in most developed countries older adults are accounting for an unprecedented share of the population. READ MORE
Private equity-backed SPAC IPOs dwindle
Initial public offerings of special purpose acquisition companies backed by private equity or venture capital are heading for the slowest year since 2021.
In the year to Sept. 4, only six private equity-backed SPACs — also known as blank-check companies — filed for an IPO globally, compared with 15 in 2023, according to S&P Global Market Intelligence data. READ MORE
Time is Now for Private Investment Industry to Get Real About AML Risks
The private investment industry has experienced tremendous growth over the past decade. In the U.S. alone, regulatory assets under management have more than doubled since 2013, reaching $128 trillion in 2023. This trend is expected to continue with assets under management projected to reach $145 trillion by 2025.
This rapid expansion of private equity, real estate, hedge funds and venture capital has put the industry in the spotlight of regulators who are concerned about potential risks for investors and the financial system as a whole, including illicit finance risks. READ MORE
Startup Buying Power — VC-Backed Companies Are Hunting For More Startups
It’s not exactly a shopping spree, but with overall M&A down, more startups are hunting for other VC-backed companies in the U.S.
In fact, startups buying other startups is on pace to make up the largest slice of the M&A pie in years when it comes to overall VC-backed, U.S.-based startup dealmaking. This is a noteworthy development in the current environment where venture capitalists and their limited partners are thirsting for liquidity amid a frozen IPO pipeline and quiet M&A market. READ MORE
Venture capitalists are divided on Harris or Trump
Being a venture capitalist carries a lot of prestige in Silicon Valley. Those who choose which startups to fund see themselves as fostering the next big waves of technology.
So when some of the industry’s biggest names endorsed former President Donald Trump and the onetime VC he picked for a running mate, JD Vance, people took notice. READ MORE
AI Frenzy Leaves VCs Scrambling for Winning Investments
Artificial intelligence (AI) has completely reshaped the once-flourishing venture capital environment. Although AI startups have attracted substantial funding, traditional VC exit routes, particularly through initial public offerings (IPOs), have become increasingly difficult to navigate.
Tech giants are investing billions in AI startups and offering funding, cloud credits, and strategic partnerships. This has made it harder for VCs to compete, as these well-backed firms don’t need to rely on IPOs for growth. Consequently, the AI-driven IPO market may remain muted for the foreseeable future. READ MORE