Four secrets to unlocking venture capital

Securing venture funding is an intricate dance of presentation, persuasion, and perception. It’s an art. As an experienced investor in AI, tech, and biotech startups, I’ve observed a pattern among the successful ventures I’ve backed.

These companies, each unique in their offerings, share four distinct traits that set them apart in the competition for venture capital. I offer you, today’s emerging entrepreneurs, a roadmap to both capture the attention of venture capitalists and forge strong, enduring partnerships that go beyond financial transactions.  READ MORE

Inside the mind of the best VC investor ever

Michael Moritz made an unusual career change, from a successful journalist to the best venture capital investor in history. He was the first to identify startups that would change the world, from Google and Yahoo to YouTube and PayPal. In an exclusive interview, he talks about the Israeli mistakes that have helped Hamas control the October 7 narrative, the struggle on US campuses, and his predictions for the AI sector. READ MORE

The Current Landscape for Private Equity Investment: What Entrepreneurs Need to Know

What do entrepreneurs looking for private capital investment need to know in today’s economic climate? Procopio Mergers & Acquisitions and Strategic Joint Ventures co-leader Jason Femrite dove into that topic in a Q&A with Craig Dupper, Managing Partner of Elan Growth Partners LLC. They discussed the current private equity landscape, tailored growth strategies, and working capital optimization, while providing advice to company leaders looking to engage with a private equity investor. READ MORE

Confidence of a better year surges among private equity execs

A global survey of PE executives shows that 60% are expecting deal activity to improve this year, a sharp rise from the 36% who felt the same a year ago. The S&P Global Market Intelligence report also found that optimism is strongest among smaller and mid-tier PE firms compared to larger peers.

There’s good news too for fundraising with just 15% of general partners feeling that things to be worse this year, one third of the percentage that said that last year. But venture capital professionals are concerned that limited partners may reduce their allocations, while 68% of these respondents expect deal activity to improve in 2024. READ MORE

M&A Is The Key To Unlocking Startup Liquidity This Year

The venture capital ecosystem faces a severe liquidity crunch. But although the IPO market shows new signs of life, startup investors should be looking to M&A this year to bring more capital back into the system.

That’s the view from Ryan Hinkle, managing director at New York-based startup investor Insight Partners, one of the most active investment firms in the bull run in private tech companies in 2021 and into the first half of 2022, when the firm announced its $20 billion fund, its largest to date. READ MORE

Why founders need to play the long game

Hans Tung, a managing partner at Notable Capital, formerly GGV Capital, has a lot of thoughts on the state of venture capital today.

With $4.2 billion in assets under management, Notable evolved from 24-year-old cross-border VC firm GGV Capital, and Tung was around when GGV invested in the likes of Affirm, Airbnb, StockX, Square and Slack. READ MORE

Solid US Space Mining Regs Could Attract Investors, VC Predicts

Mining in orbit is getting closer to becoming a reality and, with business prospects protected by policy—at least in the US—one investor is predicting the dollars will start rolling in. 

“My hot take is that there are too many investors sleeping on space tech because they are too risk averse,” said Katelin Holloway, a founding partner at 776 venture capital firm, which invested in both Astroforge and Interlune. “In order for this to work for you, you have to be confident enough to make a big bet. You have to be willing to trust that the rules and regulations will follow.” READ MORE

VC-Backed Founder Pitches Shark Tank And Wins Big. Is This A Trend?

Millions of Americans tune into the popular tv show Shark Tank, to watch ambitious entrepreneurs pitch an investment opportunity to a panel of celebrity angel investors. And while entertaining and educational, the deal terms are notoriously harsh and far worse than what is standard for a typical venture capital (or, VC) investment. According to Yahoo Finance, the average Shark Tank investment per deal is just over $300,000, with average equity taken at 24.99%. On the other hand, it is not uncommon for start-ups with no product or market validation to raise what is called a “pre-seed round” of $2-3 million in venture capital, at a $6-8 million pre-money valuation, giving up around 15-20% of the business. READ MORE

The Macro-Economic Environment: What It Means for VC Firms

Hope for a resurgence during 2024 in Venture Capital fundraising, investment, and returns was strong at the beginning of this year, with optimism fueled by the recovery in 2023 of U.S. stock markets (lead by the performance of large tech companies) and anticipation about how AI might transform industries. Market observers were optimistic then that U.S. venture investment activity would pick up significantly from 2023 levels, which—based on PitchBook data—had reverted to the lower average level of investment seen during the period of 2018-2020 as compared to the robust levels of activity seen in 2021 and the first half of 2022. This hope was centered in large part on expectations about how the Federal Reserve would begin lowering interest rates. READ MORE

AI Funding Stays Strong Despite Few Billion-Dollar Rounds

The slowdown some predicted for AI funding did not play out in the first quarter.

Venture funding to AI-related startups actually increased in Q1 2024 compared to Q4 2023, Crunchbase data shows. The first quarter saw $12.2 billion invested in venture-backed AI startups in 1,166 deals. The dollar number represents a modest 4% uptick from last year’s final quarter, which saw $11.7 billion go to similar startups in 1,072 deals. READ MORE

FTC Noncompete Rule’s Tentacles Reach M&A and Private Equity

The Federal Trade Commission’s final rule banning noncompete provisions in contracts will have broad implications for employers and employees in the labor and employment context. It will also impact businesses and their owners entering into sale transactions and any other transactions involving noncompetes. READ MORE

Private equity deals defy the lack of rate cuts

Conventional wisdom entering 2024 was that private equity dealmaking would surge on a series of interest rate cuts by the U.S. Federal Reserve.

Fast forward: The prediction was right, but for the wrong reasons.

By the numbers: U.S. private equity activity is up 54% year-over-year, with nearly $132 billion of deal value, according to LSEG. READ MORE

Private Equity and Venture Capital Industry Shows Resilience and Optimism in 2024

The private equity industry is showing resilience and optimism for 2024 despite shifting market dynamics, according to the S&P Global Market Intelligence 2024 Private Equity and Venture Capital Outlook. According to the outlook, private equity executives are notably more optimistic about deal activity in 2024 with 60% expecting an improvement, compared to 34% last year. Survey respondents also showed increased interest in private credit and shared that artificial intelligence (AI) will play a larger role in deal sourcing and target selection.

"This year's survey revealed more optimism among both general partners (GPs) and investors as they are racing for a return to increased deal activity with increasing valuations allowing them to exit their backlog of investments and return cashflows to limited partners (LPs)," said Thomas Mercieca, associate director and lead author for the report, at S&P Global Market Intelligence. "There is also increased investor interest in private credit allocation, with 61% of LPs reporting that they will increase their asset allocation to the asset class in 2024. We are pleased to see that despite macroeconomic challenges still lingering, the industry remains adaptable and poised for growth throughout 2024." READ MORE

5 Trends Steering Venture Capital In 2024

While some analysts might call the current state of the venture capital industry a winter, there is still a warm investment climate for startups and established businesses. Even if your business isn't on the same scale as OpenAI—setting the tone for the AI industry and securing a reported $10 billion funding round from Microsoft—the funding opportunities are still abundant.

At all times, investment firms and VCs have resources to support innovators and cutting-edge technological novelties. Based on what I'm seeing in the industry, they're now looking for businesses that show promise for predictable growth and liquidity and align with current VC trends. READ MORE

Embracing Change And Venturing Into VC

Thanks to online retailers and the magnetic draw of unlimited two-day shipping, convenience stores have never felt less convenient.

It felt like an overnight shift from our usual way of swinging by the drugstore to an easy press of the button (or set to auto-ship) to get us what we need as quickly as we need it. Before these online retailers rose to prominence, convenience was a term we held quite loosely. But suddenly we have discovered a new need and an entirely new meaning of convenience. READ MORE

Investors won’t give you the real reason they are passing on your startup

When an investor passes on you, they will not tell you the real reason,” said Tom Blomfield, group partner at Y Combinator. “At seed stage, frankly, no one knows what’s going to fucking happen. The future is so uncertain. All they’re judging is the perceived quality of the founder. When they pass, what they’re thinking in their head is that this person is not impressive enough. Not formidable. Not smart enough. Not hardworking enough. Whatever it is, ‘I am not convinced this person is a winner.’ And they will never say that to you, because you would get upset. And then you would never want to pitch them again.” READ MORE

The Shrinking Series E: More Senior Startups Raise Smaller Follow-On Rounds

Typically, when a venture-backed startup raises a follow-on round, the size of the investment and the company’s valuation go up as well.

One expects a Series D round, for instance, to be larger than a Series C. Another bump usually occurs should the company secure a Series E. READ MORE

IPO Market Insiders ‘Cautiously Optimistic’ That Current Trickle Will Get Stronger

With Microsoft-backed data security firm Rubrik set to enter the public market this week, talk about the rejuvenated IPO market has returned as many wonder who may be next, and when.

Rubrik is set to join the likes of chip startup Astera Labs, Walmart-backed Ibotta and online forum host Reddit as one of the bigger IPOs so far this year. Those IPOs came after last year’s second-half offerings by Arm Holdings, Instacart and Klaviyo helped thaw an IPO pipeline that had been frozen for nearly two years. READ MORE

More M&A players hold back stay-bonus ‘dry powder

While a growing appetite for mergers and acquisitions appears to be afoot, there are signs some buyers are nonetheless more guarded when it comes to tapping their retention bonus budgets for payouts designed to keep target companies’ top executives and employees in their seats. READ MORE

The Mixed State Of Startup Funding In 2024

Startup investors kept a tight hold on their wallets in the first quarter of 2024, Crunchbase data shows. There were big exceptions — some AI, healthcare, energy and robotics startups, among others, received massive investments — but overall the tone was cautious as the year got started.

To break it down further, let’s look at 11 charts based on recent Crunchbase data that show the state of the startup world in early 2024. READ MORE