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Private capital activity has increased in recent years. For startups, raising private capital offers financial support for development and innovation.
Our firm's capital raises have included obtaining capital through funds and direct investment. Drawing from that experience, here is a look at the current private capital landscape and strategies for successfully raising capital. READ MORE
Startups in sectors that saw steep funding declines may be getting fresh attention from investors, courtesy of new industry-focused funds that closed this year.
In areas from consumer products to apps to gaming, U.S. venture firms have raised fresh capital to invest in industries where funding levels remain drastically below peak. This, along with a modest uptick in first-quarter venture investment, indicates some sectors may have hit a cyclical low last year and should be heading higher. READ MORE
With VC firms in the U.S. spending only half of the $435 billion funds raised between 2020 and 2022, dry powder reserves have reached a record high. According to Pitchbook and the Financial Times, $311 billion still awaits deployment.
Meanwhile, terms like "unicorpse" are being thrown around as high-growth companies are running out of money. READ MORE
In the world of venture capital and business start-ups, the greatest measure of success is a company that is valued at more than $1 billion and earns over $100 million annually. These businesses are called “unicorns,” and according to the analytics firm CB Insights there are more than 1,200 such companies operating in the U.S. today, over 500 of which were created in the past decade. So why is it that despite significant financial backing over the same decade – via venture capital and government funding – very few educational technology companies have reached unicorn status? Let me count the ways. READ MORE
Dear venture capitalists,
I've been covering your industry for over two decades, through booms and busts and back again. If there is to be another two decades, you'd better change your behavior. And quick.
The basic VC model is cyclical. Raise money, invest that money, exit via IPOs or strategic sales, and then use those exits to raise more money. READ MORE
A brisk new trade in the financial futures of millions of retirees is unnerving some US workers, regulators, and politicians who worry that private equity firms will invest corporate pensions recklessly.
Recent lawsuits challenging AT&T, Lockheed, and Alcoa’s plans to turn their pensions over to Athene, which is owned by Apollo, casts a broader spotlight on private equity’s push into new corners of finance. Sen. Sherrod Brown has held hearings, cheered on by the Teamsters, and the Labor Department is weighing whether to require companies to at least consider whether an insurance business is owned by private equity before turning over their pensions. READ MORE
Warren Buffett famously said that when he owns outstanding businesses with outstanding management teams, his favourite holding period is “forever”. Fix-and-flip private equity bosses have come round to his way of thinking. READ MORE
The fundamental bargain of M&A seems pretty simple. At the closing of a deal, the buyer pays the seller, and gets a business in return.
It hasn’t been so straightforward for the family who agreed in 2022 to sell its California supermarket Save Mart to the private equity firm Kingswood Capital Management, which valued the grocery chain at $245mn. READ MORE
Last quarter, our analysis of Crunchbase data shows 178 AgTech startups raised a total of $1.3B. This represents a 1% increase in funding and a 5% increase in deals from Q4 2023. There were three AgTech exits last quarter, all through M&A transactions. READ MORE
Today’s social divisions are as palpable as ever, and on the receiving end are often people from marginalized communities, immigrants and refugees.
As investors, we know many founders who have recently arrived to the U.S. from countries suffering humanitarian crises, or whose teams are stuck in war zones. The challenges they face in everyday life — let alone finding success as an entrepreneur — are unimaginable to many. READ MORE
US venture fund returns remain negative but are trending up once again, a hopeful sign for a struggling fundraising market after a sustained period of portfolio markdowns.
One-year rolling IRR bottomed out in Q4 2022 at -17.9% before rising to -9.1% in Q2 2023, according to the latest PitchBook-NVCA Venture Monitor. READ MORE
Venture investors are the hidden hand behind the most innovative companies surrounding us. According to research conducted by one of us (Ilya), venture capitalists were causally responsible for the launch of one-fifth of the 300 largest U.S. public companies in existence today. They have played an essential role in unlocking the power of the internet, the mobile revolution, and now artificial intelligence in all its forms. Apple, Google, Moderna, Netflix, Airbnb, OpenAI, Salesforce, Tesla, Uber, and Zoom—these firms disrupted entire industries despite initially having fewer resources and less support and experience than their mature, successful, cash-rich competitors. All these businesses could theoretically have emerged from within an established company—but they didn’t. Instead, they were financed and shaped by VCs. Indeed, we estimate that three-quarters of the largest U.S. companies founded in the past 50 years would not have existed or achieved their current scale without VC support. READ MORE
The term "data-driven investor" might sound pedestrian—it’s hard to point to an industry that hasn’t become more data-driven over the past two decades. But in recent years, the private capital industry’s adoption of data-driven insights represents a very real and material shift in how firms are now operating.
As a proxy, one can look at the hedge fund industry for a historic example of this strategic shift. Up until the 1980s, hedge funds were mostly run by Wall Street veterans who used their intuition and connections to make investment decisions. But as more data became available, a new breed of funds emerged that combined quantitative models with human judgment to drive better decisions and reduce cognitive biases. Venture capital and private equity are at a similar inflection point right now. READ MORE
Last year was a big one for the secondary market. The party isn’t over yet though: Industry experts predict that 2024 will be another record year for the exit strategy.
Between $110 billion and $115 billion of stakes in private funds changed hands in 2023, depending on who you ask. According to a recent secondaries report from BlackRock, this is the second-highest year of closed transaction volume on record. READ MORE
Momentum has grown behind private-equity backed initial public offerings and, as inflation falls and central banks pivot toward reducing rates, two-thirds of private equity firms predict a rise in IPO-exit activity this year, according to EY's 1Q 2024 IPO trend report.
Five of the around 10 private equity-backed listings in the first three months of the year were among the quarter's top 10 IPOs in terms of proceeds or funds raised and include Germany's Douglas and BrightSpring Health Services in the U.S., the report says. READ MORE
Climate tech encompasses a diverse range of technologies and applications focused on mitigating climate change, either by reducing greenhouse gas emissions across various industries and processes or by removing previously emitted carbon dioxide from the atmosphere. Key sectors for climate tech include mobility & transport, energy generation & distribution, industrial processing & manufacturing, food & agriculture, and the built environment. Many climate technologies offer alternatives to conventional high-carbon processes, such as renewable energy sources and chemical production that do not use fossil fuel resources. Others are designed to complement existing high-carbon processes, for example, by capturing carbon from industrial or energy-producing facilities. READ MORE
In 2009, my friend Paul and I decided to start a company. We’ve both worked as software developers and project leaders for large companies, and we understood the challenges and opportunities of building great, modular teams that can get things done and fit right in with the corporate culture. Our idea was nearshoring or empowering our friends and neighbors in Latin America (LATAM) to work for some of Silicon Valley’s leading companies without having to leave their homes in Argentina, Mexico, or Brazil. READ MORE
Our fifth annual study, which characterizes the boards of the most heavily funded private companies in the U.S., reveals significant improvement in board diversity over the past five years.
It also points to independent board seats as the critical lever for change when it comes to increasing cognitive diversity in the boardroom, expanding networks, and, as suggested by our latest data, even boosting funding. READ MORE
Advisory boards can be a decisive competitive advantage for a company, but too often they fail to deliver on their potential. The typical life cycle of many advisory boards follows a familiar pattern: READ MORE
In the current economic landscape, characterized by higher interest rates, lower valuations, and considerable dry powder sitting on the sidelines, companies are increasingly turning to a mix of structured equity and debt to raise capital. We’ve seen this recently with notable financing rounds such as Shield AI’s $200 million Series F and Forward Health’s $100 million Series E. These cases illustrate a growing preference for leveraging both equity and debt—a strategy that is likely to gain even more traction in the current challenging conditions. READ MORE