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Defense tech became a popular topic last year — especially as the likes of Gecko Robotics, Shield AI and True Anomaly racked up big rounds — but this year has not continued that hot streak for the industry.
Through the middle of May, funding is less than half of what it was at the same point last year, per Crunchbase data, despite the war in Ukraine continuing into its third year and tensions in the Middle East running high. READ MORE
Marc Andreessen, Chamath Palihapitiya and several other tech venture capitalists are increasingly criticizing President Biden and making their disaffection known in an election year. READ MORE
Here we go again with valuations in the AI startup space.
While the first quarter saw only a single $1 billion round and a few big valuation jumps, this month has certainly brought both back to the forefront and shown that investors are still willing to say yes to a deal no matter the cost. READ MORE
Everyone is watching to see when venture fundraising will rebound. There has been much speculation surrounding when it will bounce back, and PitchBook is is now predicting it could be 2028 before we see a real recovery in venture fundraising. In this post, we explore the prognosis for a recovery and what it could mean for the greater innovation ecosystem.
Venture capital firms, or “VC’s”, experienced massive growth in 2021 through 2022, seeing their assets under management (AUM) grow 58% to $3.8 trillion. Fundraising was a principal driver of that growth; however, after those record-breaking years, venture fundraising has fallen off significantly. PitchBook analysts don’t expect this to recover to those kinds of highs until after 2028. READ MORE
The deeper you get into venture capital, or equity investment generally, the more familiar you will become with the concept of “multiples” as a tool for quickly analyzing company value.
However, there is a divergence of views about the role multiples play in venture capital investment decisions. A generational divide opened up over the past decade, with a younger cohort of investors using multiples more aggressively. READ MORE
“I’ve searched all the parks in all the cities—and found no statues of committees,” proclaimed the famous British writer G. K. Chesterton. VCs are well aware of inefficiencies and biases in groups; they also know that these biases are particularly dangerous in a highly uncertain world. And they know that team members with prepared minds can make the right call if they design a process to avoid these blind spots. In our research and work with VCs, we observed many specific practices with which VCs equip themselves. The next time you huddle in a room with your team members, you’ll be more likely to make a better decision with these four mechanisms we have learned from VCs. READ MORE
Private equity (PE) firms thrive on their ability to acquire and build great businesses even in challenging times. They are skilled at creating rapid value and adapting their plans as circumstances change. They have always had a differentiated approach that gives them an edge, and their interventionist nature is key to getting returns in a competitive market.
Given the significant ongoing shifts in the macroeconomic environment, what can PE firms do differently now to keep their private equity value creation plans on track? READ MORE
The NFL is moving closer to grabbing cash from private equity funds.
According to Bloomberg.com, the quarterly meetings held later this month could result in the passage of a rule allowing owners to sell up to 30 percent of the team to approved investment collectives. The most any one fund could own in any one team would potentially be 10 percent. READ MORE
In the past, most small businesses would secure financing by applying for a bank loan or approaching individual investors. But today, a growing number of businesses are securing capital through private equity firms.
Private equity firms look for small businesses or startups with high growth potential and offer them expertise and financing, with the goal of eventually selling the company for a profit. The private equity market has grown substantially, and as of 2021, private equity firms manage roughly 20% of U.S. businesses. READ MORE
As the market for initial public offerings bounces back after two lifeless years, investors who’ve been impatiently waiting for their payoff are finally getting some returns. READ MORE
David Ulevitch, a general partner at Silicon Valley venture capital firm Andreessen Horowitz, is tired of the “BS jobs” at big companies.
Ulevitch lamented the proliferation of “irrelevant jobs” at megacorporations and conglomerates in an interview with Emily Sundberg for her Substack newsletter, “Feed Me,” published Monday. These positions, he argued, have contributed to the decline of the small businesses behind America’s industrial and manufacturing base, and rob profits from shareholders, who are often pensioners and retirees. READ MORE
Venture capital has been hit hard by souring macroeconomic conditions over the past few years and it’s not yet clear how the market downturn affected VC fund performance. But recent data from the San Francisco Employees’ Retirement System (SFERS) give us something to chew on.
SFERS’s venture portfolio recorded a -.9% internal rate of return last year through the third quarter, according to data from the pension fund’s May 8 meeting. The data also highlighted that the venture portfolio recorded a 48.8% IRR in 2021 and -19.9% return in 2022. READ MORE
The artificial intelligence landscape is teeming with players, and they’re not all legitimate. Some are practicing something called “AI washing,” which Securities and Exchange Commission chair Gary Gensler explained in a video includes “false claims to investors by those purporting to use those new technologies.”
In the financial space, the SEC fined two investment advisers, Delphia (USA) Inc. and Global Predictions Inc., a total of $400,000 in March for what the SEC described as marketing AI-enabled investment predictions to their clients when they were not actually using this technology. (The companies paid the penalties and accepted SEC orders without admitting or denying the Commission’s findings.) READ MORE
Chinese venture capitalists have warned the country's IPO freeze is starving tech startups of funds by keeping market participants locked into existing investments, undermining Beijing's current push to lift innovation in the economy.
Venture capital firms said at the three-day ChinaVenture Investment Conference in Shanghai that they were struggling to recoup investment through the traditional route of initial public offerings. READ MORE
While the market continues its retreat from the highs of 2021, funding for VC-backed companies saw an uptick in Q1 2024, increasing 12% from the $29.4b raised in Q4 2023. Deal volume saw its lowest levels since 2012, as investors scrutinize value propositions and look for clear paths to growth from founders. The only exception to that rule are companies in the artificial intelligence (AI) space. AI-related companies raised $5.6b in Q1, which accounted for 17% of VC investment this quarter. Prior to last year, AI represented 10% of investment on average between 2013–22. READ MORE
Global venture capital funding reached just over $22 billion in April 2024 — flat month over month and up a few percentage points year over year — Crunchbase data shows.
The slowdown in venture funding has continued despite the AI technology wave that has washed over startups in the past few years. READ MORE
In 2015, I stood at a crossroads in Silicon Valley, a place where the pursuit of venture capital was the yardstick of success. Faced with the choice of chasing after VC dollars or embracing the road less traveled of bootstrapping, I chose a path fueled by a desire for autonomy, profitability, and sustainable growth. This journey challenged the prevailing wisdom, pushing me to redefine what success in the tech world could look like. READ MORE
As global startup funding experiences a downturn, with Q1 2024 marking one of the lowest points since 2018, the landscape for entrepreneurs seeking investment has become increasingly challenging.
In these uncertain times, investors are placing greater emphasis on startups that offer tangible solutions to pressing societal and environmental issues. As a result, sustainable startups in this climate have a unique opportunity to shine by aligning their missions with the growing demand for impactful investments. READ MORE
Continuation funds are taking hold in venture capital.
Driving the news: Lightspeed Venture Partners has a term sheet from a lead investor and is hoping to wrap things up by July, while NEA is quietly working on its own vehicle, Axios has learned.
Why it matters: Historically rare in venture capital, they've been getting more attention recently as firms look for new ways to navigate the market downturn and ongoing lack of liquidity.
The big picture: Continuation funds have been a staple of the private equity world, typically used to manage one or a few assets. READ MORE
Many in the venture capital and M&A worlds have predicted this year could see a return to more robust deal-making after a slow 2023.
There is good reason for some of that optimism — as valuations of venture-backed startups have slowly come down, the IPO market has reopened slightly, and strategic and private equity buyers are loaded with cash. READ MORE