Startups Are Booming--but So Are Bankruptcies

Moxion Power, a Bay Area battery startup, once had cash coffers of $110 million. But last week, when it filed for Chapter 7 bankruptcy, it had just $201,980 in the bank. The company collapsed this summer, putting nearly 350 people out of work.

Around the same time, A&A Express (a.k.a. AA Temperature Controlled), a small refrigerated trucking company, announced it was winding down operations in South Dakota, laying off 111 employees. And in June, electric vehicle manufacturer Fisker filed Chapter 11, laying off 15 percent of its workforce, pausing work on future projects, and warning there were doubts about its ability to remain in business. READ MORE

How AI Is Helping Venture Capital Investment Decisions

Venture capital drives startup growth. However, traditional methods of evaluating and selecting projects for venture capital investment are often prone to bias. According to startup failure research, roughly 75% of venture-backed startups fail (though some estimate the total number is higher). Therefore, venture investments are associated with a high risk of financial losses.

Unlike the public market, private companies are not required to disclose financial information. As a result, many investors often refer to the venture capital market as exclusive and opaque. READ MORE

SEC Adopts Rule to Update Definition of Qualifying Venture Capital Funds

The Securities and Exchange Commission has adopted a rule updating the dollar threshold for a fund to be considered a “qualifying venture capital fund” for purposes of the Investment Company Act of 1940.

The rule updates the dollar threshold to $12 million in aggregate capital contributions and uncalled committed capital, up from the original threshold of $10 million. READ MORE

Venture capital is full of distribution deadbeats

It's no secret that limited partners in VC funds are frustrated by a lack of distributions. Now we have some data to back up their complaints, and it's brutal.

By the numbers: Nearly one-third of VC funds raised in 2017 — over six years ago — had yet to return any money to their investors through the end of March 2024, according to Carta. READ MORE

Corporate Venture Capital: Is A CVC Unit What You Need?

Picture being the captain of an aircraft carrier—the pinnacle of a country’s power and influence. As the commander of one of the largest ships at sea, you’d be responsible for upholding national defense. Yet because of the sheer size of the vessel you command, you wouldn’t be able to navigate narrow channels. As such, you’d need speedboats to explore the unknown.

CEOs of large organizations aren’t that different from captains of aircraft carriers. At the helm of massive enterprises, they steer their companies through complex global markets and, likewise, face a similar challenge—corporate innovation requires agility. READ MORE

What’s the most popular private equity sub-strategy, according to advisors?

New research conducted among financial advisors using the Crystal Capital Partners platform found that clients are particularly interested in more mature companies undergoing transformation or expansion.

Although the overall share of clients that are investing in private equity strategies is low, around a quarter of advisors said that half of their clients are focused on growth equity along with 38% of clients who are very interested in doing so and 7% who are extremely interested. READ MORE

Silicon Valley venture capital money pours into presidential campaigns

Money from Silicon Valley's venture capital community has been flowing into both sides of the presidential race.

As Vice President Kamala Harris rallies support, venture capitalists and executives like Victoria Watkins have been rallying for her.

"She wants this country to continue to thrive and move forward, and that's exactly what VC is," Watkins said. "It's finding new ways and innovative ways for the country and people and all the things that we use to move forward." READ MORE

DEI backlash: Stay up-to-date on the latest legal and corporate challenges

The Great Rollback is here. The phrase refers to Big Tech starting to slash some of the diversity, equity and inclusion (DEI) programs that were implemented shortly after the murder of George Floyd. Most recently, Zoom announced that it laid off its DEI team. Google and Meta have started to defund their DEI programs, and funding to Black founders continues to dip. Lawsuits have been filed targeting DEI programs, forcing companies to now hide their inclusion efforts while billionaires are arguing on X about whether DEI initiatives are discriminatory or not. READ MORE

How One Entrepreneur is Disrupting Venture Capital

In the competitive and often rigid realms of venture capital and private equity, traditional diligence processes can pose significant barriers to rapid investment decisions and efficient resource utilization. These processes, which are designed to scrutinize and evaluate potential investments thoroughly, often end up being protracted and cumbersome. This not only delays funding but also diverts entrepreneurs’ focus away from their primary business activities. A pioneering entrepreneur, Nicole Loftus recognized these challenges and sought to address them through innovative solutions. 

Her creation, “The Locker,” a fully automated diligence software, stands as a testament to the potential for technology to streamline and transform established industry practices. Her approach and the success of her venture offer actionable insights and valuable lessons for other entrepreneurs aiming to effect change within their industries. READ MORE

Private Equity’s Fundraising Skid Continues

Higher interest rates and uncertainty about the future of markets has made private equity and venture capital fundraising the pits so far this year. If the trends continue, 2024 will be one of the worst for those asset managers in several years.

Through the first half of 2024, PE and VC firms globally raised $365.75 billion in new capital, according to data from S&P Global Market Intelligence and Preqin. At that pace, the total amount raised will be about $731 billion, roughly 20 percent less compared to the $919.27 billion raised in 2023. READ MORE

Family offices are giving top staff equity and profit shares in battle for talent

Family offices are increasingly offering lucrative shares of equity and deal profits to staff amid a growing battle for talent, according to a top family office attorney.  

As family offices surge in size and number, and compete more directly with private equity firms and venture funds for top staff, they’re sweetening their compensation plans. Along with salaries and bonuses, many are now offering equity stakes and various forms of profit-sharing to give employees more upside and incentives. READ MORE

Why making fun of VCs is good for (almost) everyone

It was this message, posted on X in May, that earned Panos Papadopoulos a retweet from the popular “VCs Congratulating Themselves” account, which often racks up thousands of likes and shares for drawing attention to cringey or self-important moments in the tech industry.

But instead of feeling embarrassed by the public call-out, Papadopoulos — who is a partner at VC firm Marathon Venture Capital in Athens — really enjoyed it. “It's a badge of honour,” he told me. “There is too much entitlement, bad takes and God syndrome in VC, so it is great to have someone grounding people and having some fun.” READ MORE

Not every startup is AI-related. Here’s an analysis of where venture capital funding is actually going

You’d be forgiven for assuming, based on business press coverage (cough), that, at any given point in time, there is a single, mega-disruptive technology that exerts a gravitational pull on any and all venture capital dollars. In the late 1990s and early 2000s, this would have been the internet and its nascent economy. In the late 2000s to 2010s, it was smartphone and SaaS apps. A few years ago, it was crypto, which, if the prognostications were correct, we would all currently be using to buy groceries. READ MORE

VC dollars pour into biopharma, with Q2 haul signaling sunshine ahead

With venture investments pouring into biopharma, steady M&A deals and an increasingly widening IPO market, J.P. Morgan sees the industry returning to growth—finally.

Venture dollars rose in the second quarter compared to the one prior, according to a new second-quarter licensing and venture report from the bank. Biopharmas raised $7.6 billion in private financings across 107 investments, with the dollar value for both the second and first quarters beating the previous ones. The first quarter also saw 107 total rounds.  READ MORE

Vertical Farming Venture Capital Has Dried Up, But Startups Are Still Planting Seeds

As venture capital wagers go, indoor farming has not done especially well.

Over the years, investors have plowed over $6 billion into startups in the space, most during the peak period of 2019-2023. They’ve harvested meager returns so far. READ MORE

North America’s Lead Widens In Ranking Of Startup Funding By Continent

Venture capital is a global asset class. But lately, North America is gobbling up an increasing share of total investment, driven largely by rising sums going to artificial intelligence startups.

How big is its lead? Using Crunchbase data, we charted funding in recent six-month periods to the six inhabited continental regions of the globe: North America, Asia, Europe, Latin America, Africa, and Oceania, which includes Australia and New Zealand. READ MORE

Old VC funds breathe new life into secondhand stakes trading

I recently bought a secondhand road bike for the summer.

That was after weeks of searching for deals, weighing different models and figuring out a fair price. But as the weather got warmer, more buyers were actively looking. It was much trickier to find a good deal in June than it would’ve been in February. READ MORE

Cybersecurity Funding Jumps 144% In Q2

Venture funding to cybersecurity startups had its best quarter since Q1 2022 — surging 144% year to year — and seemingly building off a strong start to the year.

The increase in venture dollars was mainly due to a significant jump in nine-figure rounds — illustrating that even as investors may be pulling back on investing in young startups, they are willing to double down on more mature companies looking for growth rounds. READ MORE

Scarcity of Exits Challenges the Venture Industry

Venture firms’ limited partners are hungry for cash.

But portfolio company exit opportunities have been scarce.

It’s an understated crisis in the venture industry. The best companies don’t need to exit and everyone else can’t figure out how to. READ MORE

Europe's Venture Capital Challenge: Can The Old Continent Catch Up In The Innovation Race?

As the global economy becomes increasingly driven by technological innovation, Europe finds itself at a critical juncture. Despite being home to world-class universities, talented entrepreneurs, and some of the world's largest companies, the European Union is struggling to keep pace with the United States and China in creating and scaling innovative startups. At the heart of this challenge lies Europe's underdeveloped venture capital (VC) ecosystem, which is hampering the continent's ability to finance and grow the next generation of tech giants. READ MORE