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In early 2023, private-equity executives were stressing over falling private-asset valuations, a tough fundraising environment, and the outlook for the rest of the year.
They were right to worry. In 2023, private equity’s capital flywheel malfunctioned, setting the stage for a brutal 2024 during which the fundraising skid has continued and general partners are fighting fires in portfolios. READ MORE
“Women can’t afford to fail.”
I once heard this from a venture capitalist with a women-led mandate. The implication was clear: While funding was allocated to women-led companies, there was zero tolerance for anything but success. Failure would only validate the belief that women didn't deserve investment.
And yet, the historical rate at which venture capital (VC) backed businesses fail is well-documented. It has been an acceptable risk for men to fail not just regularly, but with such splashing bravado that it’s actually celebrated. The tech world’s passion for failure–promoting a culture of “embracing failure” and mantras of “failing fast” to spur innovation hasn’t just been a Silicon Valley trend but one of its primary exports. READ MORE
Investors hoping for a steep drop in early-stage startup valuations have so far been disappointed, but prices for these companies are cheaper than they first appear—signaling an era for better returns may be on the horizon.
Early-stage startup valuations have remained sticky despite a steep downturn in venture capital investment. The median US VC early-stage pre-money valuation was $45 million in the first half of 2024, about the same as in 2022. READ MORE
Every startup begins with a vision. But to make that vision a reality, entrepreneurs and aspiring leaders need more than a dream — they need money. This typically leads to a chase after what many consider the holy grail: funding. However, with venture capital (VC) funding hitting a decade-low in 2023, funding has become more scarce and especially hard to secure for those companies in their early stages.
Many young companies don't realize that funding is not the only path to success. In fact, a lack of funding can be a company's secret weapon. READ MORE
I’m a VC and a common question I get from early stage founders is how to set up a board. Should it include all of the founders? How large should it be at each round? And in particular: Who should be the first investor to join? Choosing the right first investor board member is crucial for the long-term success of your startup.
In the frothy zero-interest-rate days of 2020/2021, startup capital flowed freely. Many early-stage companies raised seed through series A rounds, often opting for party rounds with no meaningful lead investor, while sometimes altogether avoiding adding an investor board member. This approach may have some merits, though as markets shift and things get rocky, here’s my advice for founders: It’s more important than ever to have someone on your cap table (and your board) who is deeply committed to your company over the long term. READ MORE
Venture capital funding into biopharma rose to $9.2 billion across 215 deals in the second quarter of this year, reaching the highest funding level since the same quarter in 2022.
This compares to the $7.4 billion reported across 196 deals last quarter, according to PitchBook’s Q2 2024 biopharma report. READ MORE
The technological landscape is constantly evolving, and with it, the business models that drive innovation. While Software as a Service (SaaS) has already transformed industries, a new paradigm is emerging: Hardware as a Service (HaaS). This model has been widely adopted by major public companies such as Amazon and Microsoft and the market has given a resounding stamp of approval.
The next big wave of opportunity in the venture landscape is HaaS with a public market primed to welcome venture-backed HaaS companies with open arms into the public markets for years to come. READ MORE
VCs are increasingly buying shares of late-stage startups on the secondary market as they try to get pieces of the hottest ones — especially AI companies. But they are also increasingly doing so through financial instruments called special purpose vehicles (SVPs). Some of those SPVs are becoming such hot commodities that they are commanding premium prices.
While that’s good for the VC selling an SPV, it’s a riskier choice for the buyers. And all of this is another sign that AI startups are brewing a bubble. READ MORE
Foreign governments are increasingly using venture capital investment to spy on U.S. companies and pilfer their intellectual property, or IP. That’s according to the National Counterintelligence and Security Center, an agency of the federal government. Private investment from overseas is vital to sustaining U.S. startups and innovation, but it’s also a method used by other countries — primarily China, but also Russia, for example — to harm the U.S. economy and compromise national security.
Michael Casey, director of the National Counterintelligence and Security Center, discussed the problem with “Marketplace Morning Report” host Sabri Ben-Achour. The following is an edited transcript of their conversation. READ MORE
The time lapse between funding rounds for early-stage startups has reached the highest point in more than a decade.
That was the finding from a Crunchbase survey of U.S. companies that raised Series A funding and went on to close a Series B. The median time lapse between rounds in 2024 was 28 months — by far the longest span since 2012. READ MORE
After a surge of growth in recent years, a segment of the private equity secondaries market — called GP-led continuation funds — has been slowing down as investors become increasingly concerned about conflicts of interest and other issues.
In 2023, GP-led secondaries hit $51 billion, down from $68 billion in 2022 and are now less than half of the total secondaries market, according to a new report by Churchill Asset Management. READ MORE
In today’s column, I am continuing my ongoing and extensive analysis regarding what’s trending for the latest in AI startups, especially so for founders seeking venture capital (VC) funding, see my series at the link here. The focus of this discussion is the advent of minimum viable quality (MVQ) as a crucial keystone and essential AI go-to-market strategy that can determine the worthiness and success of any new AI startup. I’ve been talking about MVQ for quite a while and I’m excited to see that traction is taking hold on this all-important approach.
Allow me to emphasize the catchy phrase again, this time with added emphasis: Minimum Viable Quality (MVQ). READ MORE
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
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
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
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
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
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
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
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