VNTR Capital News Dec 10, 2023 – News, Events, VC Reads
Venture Capital, Web3, and Private Equity – Dec 10 News, Events, and VC Reads
Hello friends,
Happy Sunday!
VNTR Capital Newsletter is delivered to 55k+ investors weekly to share the latest news, events, and articles from the global VC and startup ecosystem.
Scroll down for VNTR Capital Community News, Upcoming Events, and VC News/Reads.
VNTR CAPITAL COMMUNITY NEWS
Spotlight
Davos WEF — Join us in Davos during the World Economic Forum 2024 at VNTR Investors Roundtable Davos on Jan 17. Companies who want to have a presence at Davos and connect with investors can apply to join us. Learn about sponsorship packages.
VNTR GP LP Summits — We are hosting 3 GP LP Summits in 2024. The registration will open soon with the launch of two new subscriptions, VNTR GP and VNTR LP memberships, with new premium introduction services:
Lisbon - April 2-4
New York / Hamptons - July (TBD)
Singapore - Oct 24-27
Contact us to secure your spot at the VNTR GP LP summits.
Corporate Sponsorship — We designed a new annual corporate sponsorship program to help Companies interested in leveraging VNTR events, newsletters, and the VNTR platform to forge connections with investors and premium clientele in 2024. Companies are invited to Apply or respond to schedule a call.
We are actively recruiting Chapter Directors in Riyadh, Madrid, Cape Town, Doha, Shanghai, Chicago, and Los Angeles to expand the VNTR Capital community. As Chapter Directors, you will play a crucial role as super connectors, fostering growth and establishing strong ties with the global Venture Capital community. Apply to join
This Week:
It was a busy week with offline events in Cascais, Berlin, Bengaluru, and Miami. Furthermore, we organized the December VNTR Speed Networking and concluded the year with the final VNTR PRO members' masterminds for 2023.
Upcoming VNTR Events
The final two in-person gatherings to follow after organizing a total of 69 offline events this year.
Thank you to our Partners:
Zeno is an innovative platform poised to transform the education landscape. At Zeno, we blend cutting-edge technology with personalized learning to make education more accessible, engaging, and effective. We're not just teaching; we're equipping learners globally with the skills to excel in a rapidly changing world. Contact Rafael Marimón-Nivar to learn more.
Mercury offers banking for startups at any size or stage. With an intuitive product experience, founders can access free checking and savings accounts, debit and credit cards, domestic and international wire transfers, treasury, venture debt, and more — and manage their business with confidence. Mercury also offers vibrant community programs that provide founders with the connections, advice, and resources to help them build the next great companies. Launched in 2019, Mercury is trusted by more than 100,000 startups. Mercury is a financial technology company, not a bank. Banking services provided by Choice Financial Group and Evolve Bank & Trust®; Members FDIC. Contact Ben Kromnick to learn more.
VNTR Capital 2024 Events:
Jan 17 Venture Capital Investors Roundtable Davos (World Economic Forum 2024 side event)
Jan 25 VNTR Investors Roundtable Melbourne (Australian Open 2024 side event)
50+ side events for 2024 will be released by the end of 2023.
RSVP to Upcoming VNTR Capital Events
Follow us on Social media: Instagram, LinkedIn, Facebook, Flickr, and Twitter.
UPCOMING VC EVENTS
Dec 11-12 Global Blockchain Congress, Dubai, UAE
Dec 12-13 New England Venture Summit, Boston Dedham, MA, USA
Dec 15-16 Super Angels Summit, Abu Dhabi, UAE
Dec 21-22 Web3 Beyond Borders, Tokyo, Japan
Jan 9-12 CES, Las Vegas, USA
Jan 10-12 CFC, St. Moritz, Switzerland
Jan 10-11 MetaVSummit, Dubai, UAE
Jan 15-19 DavosWeek, Davos, Switzerland
Jan 15-19 unDavos, Davos, Switzerland
Jan 15-19 World Economic Forum Annual Meeting, Davos, Switzerland
Jan 16-18 iFX Expo, Dubai, UAE
Jan 17-19 FinTech India Expo, New Delhi, India
Jan 24-26 sTARTUp Day 2024, Tartu, Estonia
Jan 24-25 Asian Financial Forum, Hong Kong
Feb 6-8 ICE London, UK
Feb 20-21 Crypto360, Dubai, UAE
Feb 21-22 Step Conference, Dubai, UAE
Feb 21-22 Catalyst, Lisbon, Portugal
Feb 23-Mar 3 ETH Denver, Denver, USA
Feb 25-28 AIBC, Dubai, UAE
Feb 26-29 Mobile World Congress, Barcelona, Spain
Feb 26-29 4YFN, Barcelona, Spain
Mar 4-7 LEAP, Riyadh, Saudi Arabia
Mar 8-16 SXSW, Austin, USA
Mar 26-27 Wow Summit, Hong Kong
April 2-4 VNTR GP LP Summit (registrations will open in a few weeks)
April 8-12 Paris Blockchain Week, Paris, France
April 18-19 Token2049, Dubai, UAE
April 18-19 EmergeAmericas, Miami, USA
April 23-25 Money 20/20 Asia, Bangkok, Thailand
May 6-7 Dubai FinTech Summit, Dubai, UAE
May 15-17 Gitex Africa, Morocco
May 22-25 Viva Technology, Paris, France
May 29-31 Consensus, Austin, UAE
June 5-7 South Summit, Madrid, Spain
If you would like to submit VC-related events, please respond to this email or Telegram @byuric
Follow us on Social media: Instagram, LinkedIn, Facebook, Flickr, and Twitter.
Check out VNTR Capital upcoming events
VC Reads
View curated VC news and articles on the VNTR Platform
New shades of GP stakes expected in 2024
GP stakes lost some momentum in 2023, but their appeal to investors remains intact. The transaction type, where dedicated GP stake funds buy minority shares in other GPs to gain indirect exposure to their fund returns and balance sheets, lost steam in 2023. But moving into the new year, GPs and LPs alike are optimistic about deal flow and foresee an evolution in how those deals are financed. Deal activity involving GPs as targets took a hit in the first 10 months of the year, with deal count down 8.3% and deal value down 25.3% from 2022's full-year total, according to PitchBook's Q3 2023 US Public PE and GP Deal Roundup Report. In Q3, 18 deals targeted asset managers, only five of which occurred through a GP stake.
In 2023, Even Big Startup Exits Come With Markdowns
Generally speaking, when a startup gets acquired by a big company or goes public at a valuation over a billion dollars, prior backers at all stages come out ahead. This year, however, that often hasn’t been the case. Because private company valuations hit such frothy heights a couple years ago, even good-sized exits are commonly well below peak. The discounts to peak pricing aren’t always vast. Marketing automation provider Klaviyo, for instance, went public at a valuation only a couple percentage points below its boom-era high. A more middle-of-the-road outcome was for Loom, a provider of video collaboration tools that sold to Atlassian for $975 million in October. While that looks like a large purchase by 2023 standards, Loom actually sold at a discount from a $1.5 billion peak valuation for its Series C in 2021.
The Week’s 10 Biggest Funding Rounds: X-Energy And Seismic Therapeutics Lead Surprisingly Big Week
Usually, as December wears on, startups announce fewer and fewer big rounds. However, that was not the case this week, as five companies announced rounds of $100 million or more. Pretty good for what is normally a quiet time of year.
Why these founders didn’t want VC money
Venture capital has been hard to come by this year for many European startup founders, as VC funds have become more cautious about investing. But now, some founders are shunning VC capital on purpose. British vertical farming company Vertical Future raised its Series B funding round from existing investors including high net worth individuals, family offices and other tech-company founders over the summer. The group’s CEO and founder, Jamie Burrows, declined to disclose the total amount they raised, but said the round was “eight figures.”
LPs stay bullish on PE
Despite industry headwinds, limited partners are still bullish on private equity.
In a survey of 500 institutional investors who manage a combined total of $23.3 trillion in assets, 64% of respondents said they remain optimistic about PE's performance and 66% said they still believe there is a significant diversification between public and private markets. The 2024 Natixis Institutional Outlook Survey signaled continued faith in the asset class as it weathers an uncertain interest rate environment that has staunched deal flow and hindered fundraising.
Big VC Funds Are Underperforming Smaller Ones and Their Future Is Dim
The smaller venture capital funds outperform large ones that have the presumed advantages of scale, brand, and experience, a report shows.
Only 17 percent of venture funds larger than $750 million have returned to investors more than 2.5-times the total value to paid-in capital, after fees and expenses. Meanwhile, 25 percent of funds smaller than $350 million achieved the same, according to an analysis of PitchBook data on more than 1,300 funds dating back to 1978 by Santé. Put another way: a smaller fund is roughly 50 percent more likely to return more than 2.5-times TVPI than a large one.
Global Venture Funding In November Slows At Early Stage
Global venture funding reached $19.2 billion in November 2023, down marginally month over month, Crunchbase data shows. Funding fell around 16% from the $23 billion invested in November 2022, which was already down by two-thirds from November 2021. Early-stage funding declined the most year over year — falling 34% — an indication that venture investors continue to scale back even when investing in younger startups. Seed funding slowed more than 15%. In contrast, late-stage funding increased by around 7% compared to November 2022.
‘Secondaries summer’ is over, but 2024 looks promising
Secondary venture activity has ebbed and flowed over the last few months, following a particularly busy summer. But 2024 may see investors returning for good, writes Rebecca Szkutak. “The buyer universe for pre-IPOs expands quite a bit when you have a functioning IPO market. The list of investors who become interested in secondaries expands to those that are interested in public markets,” Caplight CEO Javier Avalos told her.
The impact of interest rate plateau on financial startups
Interest rates have plateaued at levels not seen in recent history, which means that startups and tech companies are likely operating in a business climate not seen recently: an elevated but stable interest rate environment. This rise in interest rates has primarily influenced the shift to a more challenging environment for startups over the past 18 months, impacting everything from VC/fundraising to top-line growth to daily operating costs.
What does a good startup equity package look like?
Whether it is because founders are strapped for cash and can’t offer top salaries — or they want employees to have a genuine stake in the company they are helping to build — equity packages are relatively common in the startup world. Equity is often part of a compensation package and, when the conditions are right, returns can be significant. But, equally, the rules surrounding equity — particularly for private companies, which are the vast majority of startups — can be complex. So how do you know if you are getting a good deal?
India’s top VCs face fresh obstacles as startup investment plummets
High-flying venture investors in India managing hundreds of millions of dollars are tempering expectations, making early-stage startup bets that in best-case scenarios they hope will return 3-5x invested capital. Several leading India investors, including Peak XV Partners, Elevation Capital, Lightspeed, Nexus and Accel, have raised $500 million-plus in the past two years, emboldened by earlier home runs and vast market potential.
The Fintech Sector Trotted The Most New Unicorns Onto Our Board In November
Only nine companies joined The Crunchbase Unicorn Board in November, together adding $11.7 billion in value to the board, amid a slower funding environment for startups.
Financial services dominated the list of new unicorns minted last month, with three companies — in buy now, pay later; rebate management; and lending — from the sector galloping onto the board.
The companies were from across the globe. Two new unicorns each joined from the U.S. and China. The U.K., India, Saudi Arabia and the Cayman Islands each contributed one.
Startups are doing fine, but scale-ups and unicorns are in deep water
It seems the younger a startup is today, the better its fundraising prospects.
Recent data from Carta pushes back against the narrative that 2023 has been tough on startups that are not building an AI product. In fact, grouping startups by maturity yields a very different picture. Earlier-stage startups are seeing stronger valuations and smaller declines in total capital availability, welcome boons in a year of mostly negative news. However, late-stage investment has been in retreat, and since this segment usually accounts for the most dollars, people have been making the mistake of conflating a dramatic late-stage recession with general startup malaise.
Can cryptocurrencies be frozen on a blockchain?
Several factors, such as technological errors, security precautions, disagreements, investigations and regulatory compliance, can lead to such circumstances. So, can a crypto exchange freeze your account? If exchanges or financial institutions suspect fraudulent activity or money laundering related to the account, they may freeze funds. Furthermore, freezing may occur as a preventive measure in reaction to possible security lapses or unwanted access attempts. Funds may also be frozen during disagreements or ongoing investigations until the issue is resolved, guaranteeing a just outcome for all parties concerned.
Most Active US Investors: General Catalyst Leads The Way In November
The pace of news and investing usually slows at the end of the year, and it certainly seemed to do that in November.
No venture firm made more than eight deals involving U.S.-based startups for the month — the lowest number in some months.
General Catalyst led the way with eight deals announced and a trio of firms — Alumni Ventures, Lightspeed Venture Partners and Soma Capital — all came in second on the list with seven deals apiece.
The numbers seem woefully low for firms — Khosla Ventures had been making a good number of deals in the U.S. recently, but only managed four last month.
5 Key Areas For ‘Hard-Task’ AI To Conquer
We hurtle down the highway, well above the speed limit, moving easily over the smooth road, trusting our Tesla’s Autopilot to handle the slight bends as they come. But as we enter the Golden Gate Bridge heading toward San Francisco, the lane narrows, encroached on by construction and temporary barriers on the left, the road becomes unpredictable, uneven and full of cracks — I immediately take control of the wheel. Anyone who has tried Autopilot in a Tesla is sure to have had a similar experience. It’s good enough to handle the monotonous long highway stretches. But what’s wrong with this picture? Is there some inherent reason why AI should be good at the easy, mindless tasks, but bad at the hard ones? Logically, as processing power increases and models improve, at some threshold Autopilot ought to be better than a human.
Leading public PE firms kept their powder dry in Q3
The biggest publicly traded alternative asset managers invested far less of their dry powder in Q3, with PE capital deployment by the group falling by almost half from Q2. In the twelve months that ended in September, Apollo Global Management and TPG were the only firms to deploy more capital than the year prior, while Blackstone, KKR, The Carlyle Group and Ares Management all deployed less, according to PitchBook's Q3 2023 US Public PE and GP Deal Roundup.
Why Are Pros Craving a Spot Bitcoin ETF?
Gradually, then suddenly, as they say, bitcoin (BTC) is becoming mainstream. The biggest asset managers in the world like BlackRock and Fidelity have lined up to launch a spot bitcoin ETF in the U.S. Based on the Grayscale Bitcoin Trust's NAV discount, which has narrowed dramatically, the market assigns a probability of around 90% that the Securities and Exchange Commission will approve such a vehicle. But why is there such a big need for a spot bitcoin ETF in the first place, especially since there are already futures-based bitcoin ETFs?
Bitcoin and the Predictability of Crypto Market Cycles
The crypto market may seem like a foreign world to many, with no real rhyme or reason for how it trades. Just like traditional markets, though, crypto goes through its own cycles – and these price cycles are remarkably consistent, including their timing between peak-to-trough bottoms, price recoveries and subsequent rallies to new cycle highs.
German startups to watch in 2024, according to VCs
It’s been a challenging year in German startup land. VC funding took a nosedive this year, dropping from $12bn in 2022 to $7.3bn as of December 7, and record numbers of startups went insolvent.
At the beginning of October, 238 startups had gone bankrupt in Germany this year, which is more than the number of insolvencies across the whole of 2022.
There were, however, some reasons to be merry. A few companies raised megarounds and three new unicorns were crowned: defence tech startup Helsing, AI-based translation software DeepL, and savings and investment fintech Raisin.
But who could the next stars of the German tech scene be?
The spectacular failure of SPACs
Way back in early 2021, when GameStop stock was soaring and cratering, when the phrase Bored Ape Yacht Club entered the lexicon, and when Bitcoin was pushing above $50k, celebrities and financiers were buzzing about another investment vehicle.
Chamath Palihapitiya, a venture capitalist, described this tool as a way to even “the playing field,” offering average people an opportunity to invest in high-growth companies. Hedge fund manager Bill Ackman planned to use one to “marry a unicorn.” Athletes like Shaquille O’Neal also got involved.
The startup boom times are over - have VCs fallen in love with new industries?
Took a look at how capital was invested into companies split by the 11 broad industries we track at Carta in 2021, then compared that to the relative share in 2023 (through November). All data from US startups, from priced seed rounds to Series E+.
Couple notes up top - these are broad categories and each contains a couple of sub-segments, so if you don't see your industry listed it's probably part of a bigger set.
Also no AI listed. It's the story of the year, for sure, but it plays across many industries!
There was much less investment overall in 2023 than in 2021. This doesn't take that volume drop into account, we are simply looking at the share of pie given to each industry.
Revisiting The Death of a Venture Fund
For those of you who didn't see the news, OpenView Venture Partners based in Boston abruptly announced that it was laying off the majority of its staff and shutting down new investments. This isn't a first time fund failing to raise a second, or a fringey crowdfunding idea that failed to take shape.
This is a nearly-twenty year old firm with $2.4B of AUM that has invested in companies like Calendly, Datadog, and Expensify. This is a firm that has had some of its investors listed on the Midas List. Of all the venture firms you would expect to shutdown, this was certainly not on my bingo card. So what happened?
NFT lending: Unlocking instant liquidity with Nuno Cortesao
In this episode Violetta speaks with Nuno Cortesão, CEO and Co-Founder of Zharta, about the potential of NFTs and how NFT lending can unlock access to instant liquidity.
How big is the advantage for Europe's repeat founders?
Securing funding has been a more challenging process for European founders in the VC dealmaking slowdown. Investors have become more risk-averse. Serial entrepreneurs, armed with a proven operational track record, are entering the fundraising arena with an apparent advantage over their first-time counterparts. But to what extent do past successes translate into more and larger VC rounds? We've looked at global VC dealmaking data for European founders over the past decade to gauge the gulf between first-time founders and serial entrepreneurs—defined as those who have already launched two or more companies with successful exits.
Early-Stage VC Fundraising May Soon Heat Up Again: How Immigrant Founders Should Take Advantage
Early-stage funding has gone from plummeting to plateauing, and every seed VC I’ve spoken to has been incredibly busy. It feels like pent-up funding will soon make its way back into the sector. But for immigrants, this fresh opportunity may be more difficult to take advantage of. I’ve worked solely with immigrant founders since launching my VC fund in 2017. I’ve found that people raised in different cultures often avoid taboos or stay within comfort zones that hinder their ambitions in the United States.
Startups Are Further From Solving The Affordable Housing Shortage
For those of us hoping innovative startups might succeed in solving the affordable housing shortage, recent news has not been reassuring. One of the most heavily funded unicorns in the space — modular housing developer Veev — was reported last week to be on the verge of shutting down. Previously, it had raised $585 million in venture funding, including $400 million just last year.
Planning To Launch Your Startup In The US In 2024? You Need To Settle Down First
North America is still the world’s leading startup region, home to 50% of the top 30 global startups ecosystems and deploying around $31.4 billion of investment across all stages in the third quarter of this year. However, if you are a no-name on the American market, no matter how good your product is, you likely won’t be able to raise funds or find an audience. Once, a founder reached out to me. I didn’t respond, but he was persistent. Eventually I told him that without knowing him or his team, we could not spend our time on an unverified project given the current market circumstances, but that if someone vouched for him, we would consider his pitch.
An Investor’s Guide to Deep Tech
Here are two facts that may surprise many investors. The first is that deep (or emerging) technologies have become a mainstream destination for corporate, venture capital, sovereign wealth, and private equity funds. Deep tech claims a stable 20% share of venture capital funding, up from about 10% a decade ago. Second, deep tech returns are similar to those of other venture investments. (See the exhibit.) Our analysis of about 1,100 venture funds shows that over the past five years, the weighted average internal rate of return was 21% for traditional venture capital investors and 26% for deep tech-focused funds. (The nonweighted returns were 26% and 25%, respectively.)
71% of partners at UK VCs went to private school
VC firms are infamously lacking in ethnic and gender diversity — but socioeconomic background also has a huge impact on the type of people that get jobs in the industry.
According to a survey by non-profit Diversity VC, 71% of partners at UK VC firms attended a fee-paying school, dropping to 45% for all roles at VCs. Just 7% of the wider UK population is privately educated.
Annual equity report 2023
Every year, Carta reports on the state of equity in the venture ecosystem. Through the aggregated and anonymized data from tens of thousands of startups employing over 1.5 million people, we examine how opportunities to found companies, raise venture funding, and work at startups are distributed according to race and gender.