What To Know As A First-Time Entrepreneur Seeking Investors

Embarking on my entrepreneurial voyage was akin to setting sails on uncharted waters. It was full of lessons about perseverance, agility and the sheer grit needed to transform an idea into a thriving reality. Now with more experience under my belt, I’ve gained a new perspective on the other side as an investor.

As a result, I co-founded a foundation with another impact investor to provide resources and funding to entrepreneurs like me. Here are the lessons I've learned that can help bridge the seemingly vast expanse between nascent entrepreneurs and seasoned investors. READ MORE

The war on ESG doesn’t make sense. Least of all for taxpayers

“I am really frustrated. They [the VC Funds] don’t want to engage when we ask about ESG but they will have to. We are getting somewhere in all other asset classes already.” During our latest conversations with asset owners and limited partners (LPs) in the U.S., some were complaining that the early-stage venture capital (VC) investors they were investing in weren’t keen on ESG. 

The head of ESG at a major American asset owner explained in depth how many big U.S. VC funds have resisted scrutiny of ESG reporting and integration. This is nearly a standard practice in all other asset classes. READ MORE

Senators introduce bill to criminalize private equity ‘looting’ in healthcare

Senators Ed Markey (D-Mass.) and Elizabeth Warren (D-Mass.) have introduced a bill that would impose criminal penalties for private equity firms that extract wealth from healthcare organizations. 

The Corporate Crimes Against Health Care Act of 2024 would allow federal prosecutors to hold private equity executives liable if the business practices of their healthcare entities result in the death of a patient. Penalties include a stint in a federal prison and stiff fines.

Warren and Markey said the legislation is aimed at curbing “looting” by private equity, where investors purchase healthcare practices and hospitals only to run them out of business by prioritizing short-term profits. READ MORE

3 Ways to Get Venture Capital's Attention

If you're like most founders with a big idea, you will need significant funding to bring it to life. That means you're probably contemplating raising venture capital. Raising VC funds might be one of the most challenging hurdles in your company's early life. This is especially true given the state of VC funding in 2024.

There is no silver bullet to ensure you'll receive VC funds. You'll need assets to attract VC attention. From there, simplicity and clarity are critical to helping you catch VC interest, make it through their process, and receive funding. Importantly, you'll need a large market where your company can grow to a sizable value. READ MORE

Microsoft, Nvidia Lead In Investing In AI Startups, But Others Close Behind

Just last week it was reported chip giant Nvidia, Salesforce Ventures  and Cisco all participated in a $450 million investment for Toronto-based AI startup Cohere. That same day, Cisco and its investment arm — Cisco Investments — made news when it launched a $1 billion AI investment fund.

Those noteworthy machinations by some of the biggest names in tech are just the latest examples of these corporate giants’ desires to at best be leaders in the generative AI sector — and at worst not fall behind. READ MORE

There are risks lurking in the world of private capital

New Orleans is (in)famous for being a party town that seems to inhabit a parallel universe — what happens on Bourbon Street usually stays there, however wild. Not so, however, in America’s fast-expanding private capital world. On Wednesday, the New Orleans-based Fifth Circuit US Court of Appeals ruled in favour of six private equity and hedge fund groups to toss out a transparency rule introduced last year by Securities and Exchange Commission. This had required private equity, hedge fund and real estate groups to start issuing quarterly performance and fee reports, perform annual audits, and to stop giving some investors preferential treatment over redemptions and special access to portfolio holdings. READ MORE

Private Equity Titans’ Nerves on Edge at Lavish Industry Party

Outside the chandelier-laden function rooms, away from the cameras and far from the stuffy booths in the main conference halls, the giants of private equity were getting honest with each other. READ MORE

Private equity bosses warn of lower returns

Private equity executives have warned that their industry faces the prospect of years of lower returns as they seek to sell assets following a frenzy of investments during the coronavirus pandemic. After booming in recent years and raising record hauls of cash, buyout groups face a challenge in exiting from trillions of dollars worth of unsold companies. Many of those deals were agreed during the 2021 to 2022 window of low interest rates and buoyant markets. READ MORE

How Startup Investments Help Corporations Accelerate Their Growth

In my experience, corporations often struggle to be more innovative and get ahead in the marketplace. They often develop their own research and development organizations, which are intended to develop new product and technology ideas.

However, such traditional approaches are typically not fast enough to stay ahead of industry trends. Corporations also collaborate with top universities to develop new technologies, but such research partnerships usually move slowly. READ MORE

The Portion Of US VC Funding That Went To Female Founders Hit A New Peak In 2023, Thanks To Massive AI Deals

In 2023, the proportion of U.S. venture funding that went to startups with at least one female co-founder reached a new peak. In fact, a quarter of all funding — $34.7 billion — was invested in companies with at least one female founder, Crunchbase data shows.

The uptick in the portion of startup investment going to female-founded companies — up from 15% in 2022 — was in large part due to a number of billion-dollar-plus rounds raised by AI companies with a female co-founder. READ MORE

In 2024, many Y Combinator startups only want tiny seed rounds — but there’s a catch

When Bowery Capital general partner Loren Straub started talking to a startup from the latest Y Combinator accelerator batch a few months ago, she thought it was strange that the company didn’t have a lead investor for the round it was raising. Even stranger, the founders didn’t seem to be looking for one.

She thought it was an anomaly until she talked to about nine other startups, Straub told TechCrunch. They were all looking to raise nearly identical rounds: $1.5 million to $2 million with around a $15 million post-money valuation, while giving up only 10% of their companies — aside from YC’s standard deal, where it takes a 7% stake. Most had raised the majority of that already from multiple angels with only a few hundred thousand dollars’ worth of shares left to sell. READ MORE

Eleventh Circuit Invalidates Contest Providing Venture-Capital Funding for Black Women

The U.S. Court of Appeals for the Eleventh Circuit held that a contest providing venture-capital funding only to Black female applicants is substantially likely to violate section 1981 of the Civil Rights Act of 1866, which prohibits race discrimination in the making of contracts. The 2-1 split decision in American Alliance for Equal Rights v. Fearless Fund Management, LLC (No. 23-13138, June 3, 2024) held that an organization devoted to “ending racial classifications and racial preferences in America” was substantially likely to prevail on its § 1981 claim to enjoin the restricted contest, and it remanded the case for entry of a preliminary injunction. READ MORE

13% of VC firms aren’t planning to raise another fund

Thirteen percent of venture GPs don’t plan to raise another fund as the LP pullback spoils fundraising efforts, according to PitchBook’s semiannual VC Tech Survey. That’s double the rate in H1 2023, when 6% said they had no plans to raise another fund.

Nearly half of venture firms—44% of those surveyed in mid-2023—had previously pushed back their plans to re-enter the fundraising process, as institutional investors became increasingly concerned with overexposure to the asset class. READ MORE

How to get a job in private equity

Private equity is a vast industry covering a range of investment firms from global companies like Blackstone, KKR, and The Carlyle Group to hundreds of smaller players that specialize by geography or sector such as Vitruvian Partners, Sovereign Capital Partners, or Bridgepoint Group. The biggest firms tend to operate beyond just private equity and invest in asset classes like real estate and private credit as well.  READ MORE

Will Europe Ever Match The U.S. For Startup Investment And Growth?

“Europe is less hard-working, less ambitious, more regulated, and more risk-averse than the US, with the gap between the two continents only getting wider.” Those were the words of Nicolai Tangen, the boss of Norway’s $1.6tn Norges Bank Investment Management (The Petroleum fund), in an interview with the Financial Times in April. As one of the largest single investors in the world, with increasing holdings in the US compared to Europe, Tangen’s views matter. But is he right, and what does it mean for Europe’s startups? READ MORE

Searching for Momentum: Private Equity Midyear Report 2024

Has private equity dealmaking finally bottomed out?

Based on data through May 15, the answer would be a tentative yes—though we’ve yet to see anything resembling a “normal” pace of investments and exits. READ MORE

VC funds take a shine to new gen’s D2C brands

Several direct-to-consumer (D2C) brands in sectors such as food and beverages, apparel, health and wellness — founded by scions of families running traditional businesses in similar categories — are drawing

These entrepreneurs with their inherent understanding of the business and deep-rooted connections in the supply chain ecosystems are best placed to launch modern avatars of legacy businesses, according to investors backing them. READ MORE

VCs are selling shares of hot AI companies like Anthropic and xAI to small investors in a wild SPV market

VCs are clamoring to invest in hot AI companies, and willing to pay exorbitant share prices for coveted spots on their cap tables. Even so, most aren’t able to get into such deals at all. Yet small, unknown investors, including family offices and high-net-worth individuals, have found their own way to get shares of the hottest private startups like Anthropic, Groq, OpenAI, Perplexity, and Elon Musk’s X.ai (the maker of Grok). READ MORE

Why Are Exits A Perennial Problem For VCs?

Venture capital firms (VCs) suffer with exits more than private equity (PE). Traditional wisdom suggests that they invest earlier in the life cycle and have to wait longer for the exit. Is this the real reason?

The past two years have been challenging for distributions for both VCs and PEs, especially the former hitting a 14-year low of 5% in distributions as a percentage of net asset value. Average distributions to paid-in capital (DPI) for VC funds launched in 2018 stand at a meager 0.3 times for both EU and U.S. managers, while DPI for funds launched in 2013 is at 1.1 times and 1.8 times, respectively. READ MORE

Main Risks And Opportunities For Venture Investors

Emerging markets provide numerous options for venture investors seeking development and variety. These countries have a large population of young, middle-class customers, propelling their marketplaces to grow faster than developed ones.

My experience as an investor has shown that the choice of investment focus depends on the geographic market. The LATAM, MENA (the Middle East and North Africa) and SEA (Southeast Asia) regions seem to be the most attractive. There, projects can receive an additional boost factor due to the market’s rapid growth. READ MORE