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In the ever-evolving landscape of private equity, one term has consistently captured the attention of investors and analysts alike: dry powder.
This financial jargon, referring to the capital that private equity firms have raised but not yet invested, has seen a remarkable surge in recent years. READ MORE
Private equity is under pressure. Higher interest rates and a still sluggish new listings markets have made it harder to sell holdings and return cash to investors. That in turn has made it more difficult to raise new funds because pension funds, endowments and family offices have less money to allocate and a growing array of other options. READ MORE
There are lots of stories you can tell about why Red Lobster declared bankruptcy this week. You can point to the impact of the COVID pandemic, which put a dent in the full-service dining market that Red Lobster never recovered from. (According to its bankruptcy filing, Red Lobster’s guest count is down 30% from 2019.) You can cite the impact of inflation and higher wages for restaurant workers, which has raised the cost of dining out and made cheaper fast-casual restaurants more appealing to consumers. And you can enumerate the chain’s marketing missteps, including its introduction of the now-infamous Ultimate Endless Shrimp for $20 promotion in May 2023, which cost Red Lobster $11 million in losses in less than a year. But the biggest reason Red Lobster went under is pretty simple: Its owners sank it. READ MORE
Over the past few years, we’ve witnessed the meteoric top of the venture and startup markets where valuations were through the roof, investors were competing with each other on speed (instead of due diligence), founders were exclusively focused on raising the next round, and startups had an almost unlimited source of capital to pursue growth at all costs.
Those days ended with a series of significant blows to the ecosystem including the Silicon Valley Bank collapse, global wars and rising interest rates. READ MORE
Raising venture capital has never been a given, but economic factors in the 2010s led to a historic flood of startup investment that gushed forward throughout the last decade. Now, the tides have turned. The return of interest rate hikes has sobered the VC community.
That’s a positive thing, according to Nasir Qadree, founder and managing partner of DC-based Zeal Capital. “I think the market needed a reset,” he said, “to understand quality deals.” READ MORE
Here’s how people think great things happen in Silicon Valley: A bright-eyed startup founder sketches a groundbreaking idea on a napkin. The napkin is picked up by a savvy venture capitalist. The VC glances at the sketch, gets excited, and wires millions of dollars to the young entrepreneur. And a unicorn—that is, a company that will reach the $1 billion level in value—is born.
This narrative of high stakes, fast decisions, and a risky gamble is alluringly cinematic. It's also a myth. And for anyone who wants to be a successful founder or investor, it’s a dangerous one. READ MORE
Investments by private equity and venture capital funds declined by 35% to $4.4 billion in April compared with $6.8 billion in the year-ago period, a report said on Thursday. The number of deals in April stood at 98, which was 56% higher than the year-ago period, the report by EY, a consultancy firm, and industry lobby grouping IVCA said. READ MORE
As a business advisor and former angel investor, I often get asked how venture capitalists (VCs) pick winners when they invest, and what to look for in innovative new growth opportunities. Everyone seems to recognize that existing business are very slow to innovate internally and often get overrun by new startups funded by venture capitalists and other savvy investors. READ MORE
Seeking venture capital investment is a pivotal moment for an emerging startup and its founders. The VC industry is large and the process of securing capital can be complex, so it’s really important to carefully prepare, assess your company and your product and know what you need before going after VC support. READ MORE
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