Why VCs Should Set Up An Entrepreneur Collective

Despite 2023 being labeled a “bloodbath” for venture capitalists, the industry remains optimistic with more than half of VCs reporting they plan to raise in the next 12 months. But to gain the confidence of LPs, VCs need to set themselves up for success beyond cash reserves. Although it takes a lot of time and energy, setting up an entrepreneur collective should be on a VC’s 2024 to-do list.

Obviously, a network of entrepreneurs offering mentorship to portfolio companies will give venture investors a better chance of success, but it’s also hugely advantageous to a fund’s reputation and financial standing. READ MORE

What can private equity firms do to re-incentivise management if the management incentive plan (MIP) is underwater?

There are a variety of options; and which might work depends upon the circumstances. There are a number of issues to consider, such as the level of consent required to make changes to the structure. There are likely significant tax implications to consider for many routes.

The solutions that might work in one jurisdiction do not necessarily work in another jurisdiction. For example, in the US it is often easier to restructure an underwater MIP. This is because incentive equity is typically structured as profits interests, with no purchase price or taxation on issue. This makes it relatively easy to issue a new series with a threshold or hurdle at a new, lower value, resetting the economics and providing a continued incentive to management. READ MORE

Private equity turns to new fundraising tactics in tough market

Private equity firms are increasingly raising money to buy individual companies on a deal-by-deal basis, as they struggle with a downturn in the market and investors look for ways to cut management fees.

A record $31bn was deployed by “deal-by-deal” investors last year, according to data provided by private equity advisory firm Triago, defying a broader dealmaking and fundraising slump in the industry. READ MORE

A Change Is Gonna Come. Right?

In 2017, the #MeToo movement took down some of the most powerful men in entertainment, business and politics, as women everywhere emerged from the shadows to bravely share their stories. A few years later, the murder of George Floyd galvanized millions of people to organize and march for racial justice.

Amid the unrest was the hope that a change was going to come. It was this sense of hope that motivated me to quit my suit-and-tie job and take the reins at Chicago:Blend, a nonprofit founded by local venture capitalists to diversify the region’s VC and startup ecosystem. READ MORE

5 VC Insights For Greater Resilience

We’re a quarter of the way through the 2020s and for a lot of VCs and startups, it has been a period of intense ups and downs. The digital acceleration and sky-high valuations of the pandemic years were quickly replaced by the geopolitical unrest, economic uncertainty, and repricing, which has defined the last 18 to 24 months, and looks set to continue this year. Many VCs and founders have never experienced such a rapid shift, and it has sparked numerous challenges, as well as soul searching and a reassessment of how to build great businesses. READ MORE

Mastering The Art Of VC Engagement: A Founder’s Guide To Strategic Fundraising

Securing venture capital funding is a nuanced art form, critical to the success of any startup. The key to unlocking this gateway lies in identifying and engaging the right individuals within a venture capital (VC) firm. This article delves into the intricacies of venture capital hierarchies and offers strategic insights for founders aiming to navigate these waters with precision and effectiveness. READ MORE

Silicon Valley Venture Capitalists Are Breaking Up With China

DCM Ventures, a Silicon Valley venture capital firm, began investing in China’s start-ups in 1999. The move reaped such blockbuster returns that in 2021, DCM said it planned to “double down” on its strategy of investing in China, the United States and Japan.

Yet when DCM set out to raise money last fall for a new fund focused on very young companies and promoted its “cross-Pacific” expertise, the firm described plans to invest in the United States, Japan and South Korea, according to a fund-raising memo that was viewed by The New York Times.

China was not mentioned. READ MORE

Investors rank securing talent as top corporate priority in 2024

Corporate directors and institutional investors differ when identifying the priorities for 2024, with directors focusing most on the economy, capital allocation and cybersecurity/data privacy, according to Smith, director for EY’s Americas Center for Board Matters, Investor Outreach and Corporate Governance.

The directors ranked the issues of “talent agenda” and climate change/environmental stewardship fifth and last, respectively, EY found. READ MORE

5 Areas Where Seed Investors Are Most Active

Predicting the future — once the realm of crystal balls and tea leaves — is now a full-fledged profession. Hundreds of professional futurists now work in government, academia and other sectors, analyzing demographic, technological and climatic trends to envision what life will look like years from now.

Here at Crunchbase News, we have our own future-telling tool: Seed-funding data. By looking at today’s cohort of very young funded companies, we can piece together a sense of the technologies startup investors see most impacting our lives in future years. READ MORE

The new realism in venture capital is healthy

The stampede of new Silicon Valley unicorns emerging into the world has thinned into a straggling herd.

Venture capital firm Cowboy Ventures recently reported that of 532 US start-ups with billion-dollar-plus valuations in 2023, 60 per cent were what it dubbed “Zirpicorns” — companies last priced between January 2020 and March 2022 when zero-interest rate policies propped up valuations. READ MORE

Deep Tech Investments Down, But Maybe Not As Much As You Think

The venture market was down 38% last year as investors continued to reel back their funding with money becoming more expensive and liquidity options drying up.

In such an environment, most would think the tech sector most greatly affected by the pullback would be deep tech — casually defined as cutting-edge scientific innovation that can create brand-new industries. With its cash-intensive research and long product-to-market lead time, it usually is not attractive to investors in a down market where cash is king. READ MORE

Startups Roll Out More Services For Growing Ranks Of Self-Employed And Gig Workers

Whether by choice or necessity, the share of workers who are self-employed or toiling in the gig economy continues to grow. And with it, tools to manage all the attendant accounting and job-finding burdens have been scaling up too.

Startups are taking a leading role. Over the past few quarters, venture investors have poured hundreds of millions into companies with offerings aimed at freelance and gig workers. Top focus areas include platforms for finding work, accounting tools and apps tailored for specific industries. READ MORE

AI Leads New Unicorn Creation As Ranks Of $1B Startups Swells

Fewer startups became unicorns in 2023, but The Crunchbase Unicorn Board also became more crowded, as exits became even scarcer.

That means that 10 years after the term “unicorn” was coined to denote those private startups valued at $1 billion or more, there are over 1,500 current unicorn companies globally, collectively valued at more than $5 trillion based on their most recent valuations from funding deals. READ MORE