How Investing In Startups Keeps Corporations At The Cutting Edge Of Technology

Corporations are always looking for cutting-edge technology to keep them more competitive. It’s a challenge because many corporations use traditional technology, yet they need to break out of it to accelerate business growth.

While becoming innovative is possible internally, corporations often struggle with it. They know innovation is critical to getting ahead of the competition, but they also know it is hard to develop innovation in a corporate environment. Let’s learn more about how investing in startups can help corporations find cutting-edge technology and how they can find innovative companies to invest in. READ MORE

What Forerunner & Bain Capital Ventures Secretly Told Their LPs This Fall

As the year closes out, venture capital firms are giving their limited partners an inside look at what they think is going on in the venture business and what trends they’re watching for next year.

These are the secret state-of-the-industry presentations that the public doesn’t get to see. READ MORE

Was it SPAC week? SEC charges SPAC with misleading statements

Perfectly calibrated to slap an exclamation point on last Wednesday’s 581-page SPAC release (see this PubCo post), this new SEC Order, posted the following day, reflects settled charges against Northern Star Investment Corp. II, a SPAC, for misleading statements in its SEC filings in connection with its SPAC IPO and failed de-SPAC transaction. In the SPAC release, the SEC noted concerns from commentators regarding the adequacy of the disclosures provided to investors in SPAC IPOs and de-SPAC transactions.  In this case, the SEC charged that Northern Star stated in its SEC filings that, prior to filing its S-1 for its IPO, it had had no substantive discussions with any potential target; in reality, however, Northern Star had had several discussions with the ultimate target regarding a potential SPAC business combination. According to the Director of the SEC’s Philadelphia Regional Office, “Northern Star’s failure to disclose discussions with its merger target kept investors in the dark about its future plans, information that would have been important in deciding whether to invest in this SPAC….Given that the purpose of a SPAC is to identify and acquire an operating business, SPACs should be transparent about any pre-IPO discussions with potential acquisition targets.”  Northern Star was ordered to pay a civil money penalty of $1.5 million for violation of the antifraud provisions of the Securities Act. READ MORE

SEC's blank-check rules coincide with market slump

The SEC approved a new set of rules for special-purpose acquisition companies (SPACs) this week, long after the damage was done by the recent mania.

Why it matters: It remains to be seen what effect they'll have on the future of blank-check companies.

The big picture: Following the SPAC mania of 2020–2021, the SEC proposed rules nearly two years ago to curb what it saw as loopholes in regulations for blank-check companies. READ MORE

VCs go vertical in backing specialized AI

Generative AI was the dominant theme of venture capital in 2023 and will likely continue to be this year. However, investment in the sector is likely to become more specialized.

A record $29.1 billion was invested across 691 generative AI deals last year, according to PitchBook data. This represents a 268.4% increase in deal value over 2022’s total. READ MORE

Building a Startup in a Tough Funding Environment

Startup founders are facing a brutal environment. While never easy to secure, venture funding is more scarce, valuations are down, exit options are dwindling, and shutdowns, fire sales, and hard pivots are happening everywhere.  Even VC firms are laying off employees — something that was practically unheard of until now.

So what is a startup founder to do? READ MORE

Shadow Governance And Antitrust In The Age Of Big Tech

As Big Tech investments proliferate across emerging startups—advancing everything from AI to crypto to biotech—markets brim with promise of human progress through innovation. But when titans extend tentacles into rising potential competitors, what whispers echo from conference rooms with two-way mirrors? Emerging trends around influence through minority board positions should spur regulators to reassess antitrust frameworks developed long before today's complex web of strategic investments between dominant platforms and startups. READ MORE

Venture Capital Is Going To Heat Back Up

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

Corporate investors remain key pillars of life sciences and healthcare

Entering 2023, the private venture-backed life sciences and healthcare landscape undoubtedly looks and feels different than it did during the fast-paced, valuation-rich days of 2021. Silicon Valley Bank’s most recent Healthcare Investment and Exits report revealed that 2022 was still the second-largest year on record for venture capital investment into healthcare companies in the US, UK and EU. However, investment dollars dropped 34% from 2021’s peak, and public markets were eerily quiet, with only 31 private venture-backed healthcare IPOs versus 174. READ MORE

It’s Crazy How Much Investors Cut Back From Q1 to Q4

As we bid adieu to 2022, it seems easy in hindsight to sum up the startup investment climate as your usual cyclic clean-up after a big party. Valuations fell, investors got pickier, and a cratering public market reminded us that tech stocks do sometimes go down.

But parsing through the quarter-by-quarter numbers for active investors, it’s clear 2022 wasn’t entirely a clean-up-the-mess year. For large investors, the party actually continued to rage through the first quarter and remained festive in the second. Only in the latter half of the year did we really see a big slowdown. READ MORE

How companies can successfully navigate the VC investment process

Securing investment from VCs can be disruptive and slow – but there are things that can be done to ease the process

Most successful founders will tell you that getting venture capital (VC) to invest in your business is often the start of a long and disruptive process. Having a fundraising plan and getting your house in order helps minimize disruption to your business, avoids wasting time and makes the process as straightforward as possible. READ MORE

Litigation Finance Drives Profits For Private Equity And Venture Capital Firms And Their Lawyers

Lawyers representing private equity and venture capital portfolio firms understand that their clients routinely face important business decisions about whether to initiate meritorious litigation claims that could result in substantial recoveries.

Yet convincing their clients to move forward with litigation—no matter how lucrative it may ultimately be—is another matter entirely. The main culprit for this hesitancy is a simple one: PE and VC firms are loath to saddle their portfolio companies with the expense of litigation when that precious capital could be used to enhance a company’s operations or develop new products. READ MORE

The legal threat coming for venture capital

After being battered by rising interest rates and choppy markets, the venture capital industry is sweating new regulations that could expose fund managers to legal risks.

The SEC is putting the final touches on a rule that would make it easier for investors to sue VCs for bad behavior, negligence or recklessness. It would “open up all types of litigation risk to being a venture capitalist,” Justin Field, the National Venture Capital Association’s senior vice president of government affairs, told MM. READ MORE

Why is VC dry powder still piling up?

Venture capital firms' cash piles continued to grow, even as dry powder fell across other private investment strategies.

Global venture firms were sitting on $585.5 billion of capital raised but not allocated as of the end of Q3 2022, according to PitchBook data. VC is the only private investment strategy in which dry powder is on pace to rise from 2021 levels. READ MORE

Most Active Startup Investors Hit The Brakes In 2022

For multiple years, the most active startup investors kept upping their games. They did more deals, backed larger rounds, and kept pushing up valuations. 

In 2022, they took a breather. Per Crunchbase, virtually all of the most prolific venture and seed investors did fewer deals last year than the year before. The value of rounds they led shrunk too, with particularly steep declines for SoftBank Vision Fund and Tiger Global Management, which pulled back in the wake of heavy losses in their existing portfolios. READ MORE

The Threat Of A Down Round: How Startups Can Adapt

Over the past four weeks, I’ve talked to hundreds of SaaS founders and there’s one recurring topic: The current funding environment. How do you address this tough situation? Do you cut costs or do you make a risky decision to keep spending and attempt to grow into the original valuation? READ MORE

Where Is Venture Capital Headed In 2022?

My colleagues and I at Prime Movers Lab reviewed over 3,000 investment opportunities last year and are on pace to exceed that in 2022. In the process, we deployed more than $400 million across six sectors: transportation, energy, infrastructure, manufacturing, agriculture and human augmentation. To accurately allocate capital across so many burgeoning sectors, every year, we run 25-plus squads, which are our internal teams that go deep on particular technologies and themes, such as lithium, orbital debris and cultivated seafood. The work of these squads, combined with the careful watching of public and private markets, have led me to a few predictions for where I see venture capital going the rest of this year. READ MORE

When A VC Fund Shouldn’t Hire A Public Relations Agency

Money is everywhere in the world of venture capital. In 2021, U.S.-based startups saw a record $93 billion worth of funding in the seed stage. Since money is such a commodity, a lot of VC funds have pondered working with PR agencies to bolster their presence so as to not miss out on checks, either signed for the next big startup or received from a big name limited partner (LP). As alluring as press clips and media mentions in top-tier outlets may seem, venture funds are often not well positioned to make any of that media happen. Based on our experience at BAM, here are five reasons why venture funds should skip the PR agency: READ MORE

Climate investment is heating up with more than $40B invested across 600+ deals in 2021

2021 was a hell of a year for startups operating in the climate space. Globally, around 1,400 investors are looking at the next generation of companies that are tackling climate change. They deployed more than $40 billion across more than 600 deals — that’s more than twice as much capital deployed than the year before. Mobility and energy startups are consistently raising the most capital, with great food & water tech in a distant third place, according to a new report from Climate Tech VC. READ MORE

In Staggering Sign Of Venture Spending Growth, Insight Partners Closes $20B+ Fund

A decade ago, $20 billion would have been enough to fund roughly a third of all global venture funding for an entire year. Today, it’s the sum that just a single investor racked up for a single fund.

This morning, software-focused growth investor Insight Partners announced it raised over $20 billion for its 12th flagship fund. That’s more than twice the size of the 11th flagship fund, which closed about two years ago with $9.5 billion and ranks among the largest funds ever. READ MORE