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For newcomers seeking to raise venture capital, things are looking bleak.
While global VC fundraising is on track for its worst year since 2015, the pain isn’t being felt equally. Emerging managers, firms that PitchBook defines as having launched fewer than four funds, are facing their worst environment in 10 years, raising less capital than ever before, according to the latest PitchBook-NVCA Venture Monitor. READ MORE
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Private capital firms are sitting on an ungodly amount of capital, after mammoth fundraising in 2020–21 and little investment in subsequent years. Late last year, Preqin estimated the amount of “dry powder” at over $4tn, almost a third of the entire private capital industry’s total assets under management. As Alphaville wrote in May, the industry has now raised more money from investors than it has returned for six straight years, for a gap of ca $1.6tn. READ MORE
“Several of you over the last few months have thanked me for coming to Israel - there is no country I’d rather be in other than the U.S. I feel blessed to be here today,” said Brendan Dillion at the opening of his remarks during the Israel Private Markets Summit. The Partner, Co-Head of Credit & Capital Markets, and Head of Capital Formation at Veritas Capital was giving a talk to a room of 500 guests on the intersection of government and technology.
“We had an epiphany in the 1990s about investing in government services,” he explained. “The characteristics we saw were that they were undercovered in private equity; there were long-term contracts of 5-7 years in nature, and they were sticky and hard to lose.” Today, the company invests across four main sectors: Aerospace Defense and National Security, Education, Sustainability and infrastructure, and Healthcare. READ MORE
If you're working in a fintech, chances are its funding comes from either private equity or venture capital. The two industries are both focused on growing startups, but their differences can make a big difference to startup employees. A recent paper from Oxford and HEC Liège researchers shows that VC backed firms are best for employee satisfaction, while private equity-backed startups excel in pay.
Analyzing one million employee reviews for startups on Glassdoor, the paper found that a company's ownership structure correlates to employee satisfaction. It found that employees in private companies tend to be much happier than those in publicly traded companies. Employee satisfaction was "significantly higher for VC-backed companies," with satisfaction levels dropping to more normal levels after an exit. READ MORE
JD Vance, who on Monday was named Donald Trump’s running mate in the 2024 presidential election, has had a number of careers throughout his life. He currently serves as the junior Senator from Ohio. He has been a best-selling author. And once, briefly, he opted to try his luck as a venture capitalist.
Over the course of six years, Vance worked at three different VC firms, which wasn’t long enough to truly be a success or a failure in the job. READ MORE
The rocket-ship story of cyber security company Wiz is the kind of thing that the venture capital industry has long relied on to draw in investors. Four young engineers sell their first start-up to a giant tech company (Microsoft) and go off to found another. This one finds an unmet need and hits the big time: it quickly raises $1.9bn from some of the best-known names in venture investing. After just four years, a different giant tech company (Google) comes along and offers to buy it for $23bn. READ MORE
Private equity (PE) firms have long been subject to strict financial industry regulations in the United States and European Union (EU). Now they are facing even greater levels of scrutiny—and a wave of new compliance challenges.
To keep up, leaders of PE firms need to proactively increase their focus on regulatory risks—in their organization, investment portfolio, and portfolio companies. Leaders also need to identify and address risks during M&A due diligence, before they make an investment. READ MORE
Global venture capital (VC) investment soared from US$75.4 billion to $94.3 billion between Q1’24 and Q2’24, fueled by nine $1 billion mega-deals—the second largest total ever seen in a single quarter. While VC investment rose to a five-quarter high, deals volume fell to 7,691—the lowest level seen globally since Q3’16. The low deal volume mirrors the ongoing challenges faced by the VC market, including the high interest rate environment and geopolitical uncertainties.
AI accounted for over half of the ten largest funding rounds globally during Q2’24 as VC investors continued to pour money into the space, according to the Q2’24 edition of KPMG Private Enterprise’s Venture Pulse— a quarterly report highlighting VC investment trends globally and in key regions around the world. These AI deals were led by a $8.6 billion raise by CoreWeave and a $6 billion raise by xAI—based in the US. READ MORE
The mountain of dry powder — money that investors have committed to private equity and venture capital funds — has set a new record high, as firms anticipate that deal markets will continue improving.
Since December 2023, private equity and venture capital funds have added $49.44 billion to their cash reserves, nearly twice as much as they did during the previous 12-month period, bringing the total to more than $2.62 trillion, according to S&P Global Market Intelligence. READ MORE
– Still fearless. The floodgates have opened, and the corner of Silicon Valley that supports former President Donald Trump in the 2024 election is becoming more vocal. Marc Andreessen and Ben Horowitz, the founders of elite venture capital firm Andreessen Horowitz are the latest, announcing yesterday that they personally plan to donate millions to organizations supporting the Trump campaign.
They object to the Biden administration’s policies around regulation of tech, especially a proposed tax on unrealized capital gains. Others have cited the antitrust efforts of the Biden administration’s Federal Trade Commission chair, Lina Khan, as a reason for their support of Trump. READ MORE
Billionaire venture capital investors Marc Andreessen and Ben Horowitz are reportedly set to announce their plans to make donations in support of former President Trump's presidential campaign.
Axios reported Tuesday that the two founders of VC firm Andreessen Horowitz are expected to outline the reasoning behind their plan to financially back Trump's White House bid in a podcast later on Tuesday afternoon. The Information had previously reported on the duo's donation plans. READ MORE
Until relatively recently, private equity buyers were viewed as largely benign. Where antitrust regulators expressed concerns with private equity buyers, it was generally in the context of them being viewed as sub-optimal divestiture buyers. This changed during the Trump administration where the Democratic minority began to voice concerns about the incentives of private equity players. READ MORE
If there’s one topic that has dominated the minds of private equity investors in recent months, it’s liquidity. It is so present that you can now even buy T-shirts on Amazon emblazoned with the phrase “DPI is the new IRR”. DPI, or Distributions to Paid-in Capital, measures how much capital a fund has returned to its investors relative to what has been called. Putting DPI ahead of the industry’s widely promoted performance metric IRR (Internal Rate of Return) sends a clear message to managers: stop focusing on returns and start selling stakes to generate liquidity. READ MORE
As private equity (PE) firms and financial sponsors of all varieties look for ways to generate liquidity in today’s economic climate, partial exits are becoming a tool that some firms leverage to provide returns to investors. PitchBook reports on several recent examples of partial exits by firms across various sectors, noting that these are not necessarily a bad thing, just a sign of the current climate. With firms beginning to utilize this option more frequently, below we look at the issues to consider when weighing a partial exit. READ MORE
The economist Hyman Minsky’s name can once more be heard in ominous whispers around Wall Street. Private equity firms have recently been undertaking such funny financial manoeuvres that those who invest in the funds have had to put a stop to it. With private equity markets depressed, fund managers have been taking on so-called net asset value (NAV) loans to pay their investors’ dividends. Far from being happy to get their money, investors realised that the funds they had invested in were borrowing from Peter to pay Paul, and told them to cut it out. READ MORE
The rise and rise of private markets has a feeling of inexorability about it. Despite increased financing costs and an uncertain growth outlook, private market assets under management totalled $13.1tn on June 30 last year, having grown at nearly 20 per cent a year since 2018, according to consultants McKinsey. While fundraising has declined from its 2021 peak, a recent survey by State Street found that a majority of institutional investors intended to increase their exposure to almost all private markets, including infrastructure, private debt, private equity and real estate. READ MORE
Funding to women-founded companies overall (including mixed-gender teams) has declined in the first half of 2024 compared to the first half of 2023, picking up $15.5 billion out of $93 billion — 17% — compared to the $24.8 billion out of $87.7 billion — 28% — in the first half of 2023, according to PitchBook data. READ MORE
It was barely half an hour after shots rang out at a Donald Trump rally in Pennsylvania, with the candidate apparently among the wounded, that Elon Musk took to X, formerly Twitter, and formally backed him for president. “I fully endorse President Trump and hope for his rapid recovery,” Musk wrote, sharing video of the chaotic scene. He meanwhile set about blaming the Secret Service for the attempted assassination, which killed one attendee and injured two others, and amplifying posts that implied their “diversity hires” were a factor in the failure to prevent it. READ MORE
Venture capital has significantly changed since its peak in early 2021. Low interest rates helped investors deploy significant capital into unicorn startups, helping them reach new heights and make their public debuts. However, as the pandemic's effects started to take a toll and inflation began to strain available capital, more companies took longer to list and hit the market. So, how should investors and businesses navigate this current market? And what options exist outside of venture capital for businesses looking to raise funds? READ MORE
Venture capital has its vice presidential candidate, with Donald Trump yesterday picking J.D. Vance to be his running mate.
The big picture: Vance wasn't a successful or failed VC. Namely because he didn't have enough time, spending just six years at three different firms.
Catch up quick: Vance was a corporate lawyer who went to Silicon Valley and got connected with Peter Thiel, via a two-year stint at venture capital firm Mithril Capital. READ MORE