How private equity conquered America

Private equity firms are buying up the US economy and stripping it for parts. From healthcare to education, utilities, and more, massive firms like Blackstone and the Carlyle Group have acquired vast holdings across critical industries essential to the health and well-being of everyday people. Instead of seeking to make these ventures more profitable, private equity firms are more likely to orchestrate to bleed their assets for short-term gains—even if those assets are univerisites, hospitals, or nursing homes. Gretchen Morgens0n, author of These Are the Plunderers: How Private Equity Runs—and Wrecks—America, returns to The Chris Hedges Report to discuss how private equity came to hold America hostage. READ MORE

Three Ways Venture Capital Will Evolve In 2024

Last year was a challenge for many in private capital. TechCrunch reported that total venture investment in the third quarter of 2023 was $73 billion, falling more than $25 billion from a year earlier and 65% from the record highs set in the fourth quarter of 2021.

As investor focus has shifted from companies that pursued growth-at-all-costs to those with solid traction and a path to profitability, fewer deals met the new threshold for investor appetite. But things are shifting again. The promise of interest rate cuts in 2024 is offering a glimmer of hope, at the same time that many of the startups that last raised at the peak of the market will soon need to raise again. READ MORE

The AI Gold Rush: How Startups Can Stake Their Claim In A Competitive Frontier

Following the debut of ChatGPT, it didn’t take long for AI companies to flood the business landscape. But while AI startups successfully raised $50 billion worth of investment in 2023, there was a clear decline in investments by the end of the year, indicating the initial investment buzz was wearing off.

Rather than casting wide nets of investments over the space, investors are now seeking stronger market fits. To succeed in this new age of AI maturation, entrepreneurs need to focus on building moats — finding unique ways to build a defense perimeter around their offering to fend off competitors or, at the very least, make it difficult to compete with them. READ MORE

Why some investors are charting a different course on AI

There's no one-size-fits-all strategy when it comes to venture capital investments in the booming artificial intelligence sector.

State of play: Large language model companies are still making headlines for raising piles of cash at eye-popping valuations, but it also appears a growing number of VCs are slinging some of their checks in other directions.

The big picture: At Upfront Ventures' annual confab in Los Angeles this week, a number of top VCs took the stage to share their thoughts on investing in AI. READ MORE

The AI Gold Rush: How Startups Can Stake Their Claim In A Competitive Frontier

Following the debut of ChatGPT, it didn’t take long for AI companies to flood the business landscape. But while AI startups successfully raised $50 billion worth of investment in 2023, there was a clear decline in investments by the end of the year, indicating the initial investment buzz was wearing off.

Rather than casting wide nets of investments over the space, investors are now seeking stronger market fits. To succeed in this new age of AI maturation, entrepreneurs need to focus on building moats — finding unique ways to build a defense perimeter around their offering to fend off competitors or, at the very least, make it difficult to compete with them. READ MORE

The Difference Between Startup Valuation And Round Pricing

On Aug. 20, 2011, Marc Andreessen published the definitive manifesto for a generation of technologists and investors, with “Why Software Is Eating the World.” It kicked off an era of immense enthusiasm for software startups, coinciding with a period of historically low interest rates.

The pace of investment accelerated over the next decade, and without sifting too finely through recent history we can reflect back on a quote from Andreessen’s essay:

“Too much of the debate is still around financial valuation, as opposed to the underlying intrinsic value of the best of Silicon Valley’s new companies.” READ MORE

States With the Largest Growth in Venture Capital Investment Over the Past Decade

The U.S. economy has continued to defy pessimistic expectations in recent months, with employment, wages, and consumer spending remaining resilient amid high inflation and rising interest rates. But one part of the economy that has retracted is venture capital investment.

Venture capital financing has been a major catalyst for business growth in recent years, particularly through innovations in fields like technology and software. Now-ubiquitous tech companies like Uber and Airbnb got their starts as venture-backed startups within the last 15 years, but the impact of VC investment has flowed into every corner of the economy. As of late, however, high interest rates have pushed venture investors to be more conservative, making it harder for new startups to raise funding and leading to widespread layoffs in many venture-backed companies. READ MORE

Europe remains hard to crack for North American GPs

A few years ago, setting up shop in Europe was the soup du jour for North American VCs. From OMERs and Lightspeed to Bessemer Venture Partners, the market attracted firms of all sizes, and the Spotify IPO seemed to wake up North American VCs to Europe’s potential to create outsized exits. VCs wanted to make sure they didn’t miss out on the next wave.

But it’s unclear that they were able to catch it. Trends haven’t fully reversed since the happy days of 2021, but they’ve come pretty close. READ MORE

As venture capital funds pull back on consumer, more private equity firms look to play a bigger role in startup investing

Private equity funding is playing a greater role in consumer startup funding, particularly as venture capital funding dipped last year.

Among startup brands, venture capitalists typically make early investments in promising companies — or sometimes even concepts — predominately based on the potential for big growth. But private equity involves making controlling investments in more established companies and helping sustain profitability. READ MORE

VC Returns Revealed

It’s a rare treat to peak behind the curtain and see how venture capital funds are performing for their investors. 

Last year, Eric made a public records request to UTIMCO, the Texas public investment fund for the University of Texas and Texas A&M systems. He wrote about those returns here.  READ MORE

Reddit hasn’t turned a profit in nearly 20 years, but it just filed to go public anyway

Reddit, the message board site known for its chronically online userbase and for originating much internet discourse, filed for its long-anticipated initial public offering on Thursday.

The move would make Reddit the first major social media company to go public since Snapchat in 2017. And the offering will come with a twist that could allow some of the most fervent of its more than 70 million daily users to buy shares in the IPO — an opportunity typically reserved for institutional investors. READ MORE

Want More Runway? Consider Your Infrastructure Costs

As a founder going into a fundraising meeting, the best story you can tell is about growth — ideally exploding user figures with a credible path to revenue or exit.

If you haven’t figured out product-market fit yet, you need more time. Until you figure it out, it’s unlikely you’re going to be able to raise. The first place you should look is the place you have the most control: cash going out the door. READ MORE

Eye On AI: So Much For That Funding Slowdown

Before the year started, we pontificated there might be a slowdown in venture dollars and for the first few weeks it was looking like that prediction might be borne out.

While the first half of January saw some nice-sized funding rounds for AI startups, extremely big rounds were nonexistent. In fact, there were no rounds of $100 million or more until the month’s waning days (both Rebellions.ai and Kore.ai announced big raises on Jan. 30). READ MORE

Investors Have Got Your Number: Navigating The Data-Driven Shift In Venture Capital

The venture capital (VC) sector is undergoing a transformative shift towards data-, analytics-, and AI-driven methodologies, profoundly altering the traditional paradigms of sourcing, evaluating, and managing startup investments. While not necessarily incipient, this movement, reminiscent of the algorithmic trading revolution that redefined public markets, is set to revolutionize venture capital. By 2025, data, analytics and AI expected to inform over 75% of VC deal analyses according to a report by Data-driven VC. READ MORE