VNTR Capital News Feb 28, 2023 - News, Events, VC Reads
Venture Capital, Web3, and Private Equity - Feb 28 News, Events, and VC Reads
Hello friends,
Happy Tuesday!
VNTR Capital Newsletter is delivered to 30k+ 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
Weekly Highlights
Membership — We are pleased to announce the launch of VNTR Community Membership, a platform designed to support our members’ investment objectives. Our initial roll-out features a number of core programs and services, including Mastermind Groups, VNTR Platform, Weekly Membership Newsletter, VNTR Bot, Priority Access to events, Partner Conference tickets, and Regional Chapters.
Our Mastermind Groups, consisting of 6-10 investors (VCs, angels, FOs), provides an exclusive forum where members can engage with each other, sharing valuable insights and advice to tackle any challenges that may arise.
The VNTR Platform offers access to our Members Directory, Events Directory, and Deal-Flow Directory, including member-only events and vetted deals shared by our community.
Our Weekly Membership Newsletter provides timely updates on new members, vetted deals, upcoming events, and experiences.
We are also introducing the VNTR Bot on Telegram, which allows members to contact VNTR directly with inquiries and receive notifications about new deals.
Members can also take advantage of Priority Access to VNTR events and members-only events, as well as Partner Conference tickets for complimentary or discounted conference investor passes.
We are also excited to launch our Regional Chapters in Lisbon/Cascais, Dubai, London, Tel Aviv, and Miami, which will host recurring events such as breakfasts, luncheons, dinners, and experiences. Our regional chapters provide opportunities for local members to connect and share deal-flow. Each chapter is managed by a Regional Director who administers programs and provides support to regional investors.
Join VNTR MembershipBarcelona — We are hosting our 2nd Investors Roundtable Barcelona today, Feb 28, as a side event to Mobile World Congress.
Dubai — Our 2nd VNTR Investors Roundtable Dubai this year will take place on Mar 15, 2023, as a side event for AIBC Eurasia. During this event, we will launch our Dubai Chapter.
Austin — Austin is gearing up for the 10-day SXSW Festival, which brings together global communities of creatives, filmmakers, musicians, comedians, and tech enthusiasts. As a side event to the festival, we are thrilled to host the VNTR Investors Roundtable on Feb 14, 2023, providing a space for investors to network and build new connections.
Portugal — Investors seeking to obtain a Golden Visa in Portugal are advised to act swiftly, as the government has recently announced plans to end the program in the coming months due to a shortage of affordable housing. With the new law expected to be approved and come into effect in two months, this presents a last chance for interested investors to apply before the window closes. To apply for the program, investors can access the application process here. Our trusted local partners can assist with finding a qualifying investment vehicle and guide you through the application process.
Thank you to our partners:
Crypto Hunters TV Show is an innovative adventure-reality series that uniquely explores cryptocurrency and the blockchain world. The show provides an exciting combination of action, education, and entertainment as contestants embark on a thrilling global adventure to uncover the secrets of the crypto world. With a focus on accessibility and entertainment, the show aims to make the excitement of cryptocurrency accessible to a broader audience. To complement their strategy for untapped markets, the Crypto Hunters Mobile Game App will also be available. The game will be directly connected to the Crypto Hunters TV show and advertised prominently. Learn more and contact HK.
Changex is a unique personal finance mobile app that connects crypto and DeFi to the real world via in-wallet banking. The company is building a swiss knife financial solution by providing access to multi-chain crypto trading, proprietary products such as Leveraged Staking to leverage any POS asset, and a Crypto Debit Card for unprecedented utility. Learn more and contact Gary.
Perfect.Live - Personal lifestyle app with premium concierge services and a well-rounded calendar for all life events. Empower your routine with integrated GPT technology for seamless access to luxury services and an effortless lifestyle. Enjoy personalized assistance with tasks, errands, and reservations, freeing up time for what truly matters. Learn more and contact Dmitri.
Upcoming VNTR Capital events:
Mar 14 VNTR Investors Roundtable Austin (during SXSW)
Mar 15 VNTR Investors Roundtable Dubai (during AIBC Eurasia 2023)
Mar 23 VNTR Investors Roundtable Paris (during Paris Blockchain Week)
Mar 30 VNTR Investors Roundtable Hong Kong (During Wow Summit)
Apr 12 VNTR Investors Roubdtable San Francisco (During Startup Grind)
Apr 27 VNTR Investors Roundtabe Austin (During Consensus)
May 2 VNTR Investors Roubdtable Rio De Janeiro (During Web Summit Rio)
RSVP to Upcoming VNTR Capital Events
The VNTR Capital Investors Community has a growing membership of 340+ qualified investors, actively investing in high-growth technology companies as VC/Crypto Fund managers, angel investors, and family offices.
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UPCOMING VC EVENTS
Feb 27 - Mar 3 Mobile World Congress, Barcelona, Spain
Feb 27 - Mar 5 Miami Web3 Week
Feb 27 - Mar 2 4YFN 2023, Barcelona, Spain
Mar 1-2 Affiliate World Dubai, UAE
Mar 1-5 Dubai International Boat Show
Mar 10-19 SXSW, Austin, USA
Mar 13-16 AIBC Eurasia, Dubai, UAE
Mar 13-15 FinTech Week Tel-Aviv, Israel
Mar 13-15 W3summit Bengaluru, India
Mar 15-17 sTARTUp Day 2023, Tartu, Estonia
Mar 19-20 Crypto Expo Europe, Bucharest, Romania
Mar 20-24 Paris Blockchain Week, Paris, France
Mar 20-21 World Blockchain Summit Dubai, UAE
Mar 23-25 Art Basel Asia, Hong Kong
Mar 29-30 WOW Summit Hong Kong
Apr 11-12 Startup Grind, Silicon Valley, USA
Apr 26-28 Consensus by CoinDesk, Austin, USA
Apr 27-28 TechChill, Riga, Latvia
Ma 12-14 TMRW Belgrade, Serbia
May 15-19 AIBC Americas, Sao Paolo, Brazil
May 24-25 Next Block Expo, Warsaw, Poland
May 30 - Jun 4 Tech Week San Francisco, US
May 30 - Jun 2 Innovex, Taipei, Taiwan
May 31 - Jun 2 GITEX Africa, Morocco
Jun 7-9 South Summit, Madrid, Spain
Jun 9-10 Epic Web3, Lisbon, Portugal
Jun 12-13 Metaverse Summit, Paris
Jun 14-17 Viva Technology, Paris
Jun 26-29 Collision, Toronto, Canada
July 6-7 Block3000, Lisbon, Portugal
July 19-22 AIBC Manila, Phillipines
If you would like to submit VC-related events, please respond to this email or Telegram @byuric
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Check out VNTR Capital upcoming events
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VC READS
5 questions emerging managers should ask before selecting LPs
When most people think of venture capitalists, they often think of investors, the people writing checks to fund startups. But that image is only one part of venture capital. In order to make those investments, venture firms must first have the money, which means they’re not only just the funders, they’re fundraisers, too. But when you’re running a VC firm, especially as an emerging manager, how do you know which investors and limited partners (LPs) to target? After more than 30 years of investing in both private and public companies, I’ve now started as a fund manager, and I recommend that emerging managers ask these five questions before seeking out and pitching to potential LPs.
Once Taboo, Startups May Be Warming To Down Rounds
In 2021 it may have seemed any startups could raise $100 million at the snap of its fingers — but the last year-plus is forcing some to find more creative ways to raise rounds and even contemplate the once taboo “down round.” Last year ended with a slew of unicorns announcing deals that sliced into their valuations and the start of this year brought similar headlines, with reports that highly valued startups such as payments provider Stripe and online prescription delivery company Capsule are looking to raise down rounds due to market conditions. As funding has become increasingly hard to secure for startups, down rounds, flat funds — fundraises at the previous round’s valuation — and other creatively structured rounds are becoming commonplace, as necessity dictates changes in the way companies raise cash.
What crisis? Israel's software giants expect double-digit growth in 2023
The fears of a deep crisis in high-tech continues to fade with each financial report released by the big Israeli companies traded on Wall Street.
After good reports from Check Point and Monday, it was Wix, Fiverr, and Global-e that provided a pleasant surprise on Wednesday, recording better than expected performance in the fourth quarter of 2022, which was one of the hardest the high-tech industry has experienced in a while. More importantly, the three companies believe they can grow at a double-digit rate in 2023.
A generation of high-profile women tech leaders have stepped aside. What’s next?
When Susan Wojcicki was named CEO of YouTube in 2014, she was in relatively good company as a woman leader in Silicon Valley.
Marissa Mayer, her former colleague at Google, was running Yahoo and posing for magazine covers. Sheryl Sandberg was the influential second-in-command at Facebook who had just published a best-selling book on corporate feminism. Former California gubernatorial candidate Meg Whitman was at the helm of HP, and Ginni Rometty was the first woman in charge of IBM.
Wojcicki’s announcement last week that she is stepping down from her leadership role at YouTube marks the end of an era. The tech industry has now lost an entire generation of trailblazing women leaders and replaced them mostly with men.
SPACs face liquidation as deal deadlines loom
Two years after SPAC listings hit an all-time high, many blank-check companies that launched during that peak are now facing a make-or-break year. SPACs were one of the hottest market trends in 2020 and 2021, but investors' enthusiasm for these listings slumped last year amid the downturn in the public markets. Under SEC rules, blank-check companies usually have just two years to merge with a target company after listing, although it can be extended to three. If the deadline is missed, the rules require the SPAC to be liquidated. Many deadlines are coming up this year for those that listed in 2021, but with volatility persisting in the public markets, acquisitions will be harder to come by.
China may keep IPO lead, helped by friendlier regulation and ample liquidity
China is set for another strong year for initial public offerings helped by a still-accommodative monetary policy and a regulatory push to make it easier for quality companies to access equity capital. The Shanghai Stock Exchange and Shenzhen Stock Exchange, the main venues for listing in mainland China, topped the global IPO league table in 2022 with 404 companies raising US$78.67 billion, according to S&P Global Market Intelligence data. Equity fundraising in the U.S. fell sharply last year, dragging the global IPO total to nearly half the amount in 2021. "While we expect Chinese stock exchanges to excel in 2023, especially as COVID-19 and travel restrictions lift, we would hope for a more favorable environment for fundraising generally in 2023," Christopher Ma and Claudia Yiu, Hong Kong-based partners at law firm Simmons & Simmons, told S&P Global Market Intelligence in an email.
Crypto and blockchain education becomes priority at top universities
In a world where cryptocurrencies and blockchain technology make direct peer-to-peer transactions possible and transcend traditional financial norms, more people want to learn about them to keep up with the times. Universities worldwide are beginning to offer cryptocurrency-related courses to cater to this new paradigm. Due to rising demand, many of the world’s top universities offer crypto-related courses. There’s been a lot of hype regarding cryptocurrencies — mainly due to their disruptive potential — and the rise of crypto education has strongly coincided with this. According to a 2022 survey from Study dot com, about two-thirds of American parents and college students conversant with cryptocurrencies thought the topic should be taught in schools as mandatory.
The IPO drought could end soon—if these factors converge.
The IPO market remains dry, and a comeback to its pre-2022 glory will rely on a confluence of factors. Among them: a stabilized macroeconomic environment, more clarity on the direction of interest rates, greater alignment on pricing between buyers and sellers, and a company that leads the pack back onto the public exchanges. When these factors converge, the return to public listings will likely be swift and explosive—when that may happen depends on who you ask. For now, tumbleweeds continue to blow through the NYSE. "You've got to stop saying that, Jessica—that the IPO window is closed," David Ethridge, US IPO services leader at PwC, said to me in a call last week. "The market isn't closed. It's just difficult."
African Fintech Startups Saw A Flood In VC Funding Last Year
As rising borrowing costs and recession concerns weighed on global venture capital investment in 2022, Africa’s start-up ecosystem attracted record funding. While most regions experienced double-digit declines in start-up funding last year, Africa posted gains in total investment volume, deals and number of investors. Start-up funding on the continent grew by roughly 5% in 2022, compared to a decline of 62% in Latin America and 39% in Asia Pacific. Globally, venture capital funding was down 35% at $445bn, albeit still well above the levels posted in the years prior to the Covid-19 pandemic. Total funding for the continent passed the $3bn mark for the first time and hovered around $4.8bn-5.4bn by the end of the year. It is hoped that continued capital flows to the start-up ecosystem will support broader development goals, ranging from increasing financial inclusion to enabling digital transformation and the energy transition.
Sequoia Turns to Outside National-Security Experts to Vet New China Tech Investments
Sequoia Capital, one of the world’s largest venture-capital firms, is consulting independent U.S. national-security experts to vet some of its China arm’s potential investments, people familiar with the matter say, as Washington steps up efforts to stop American money from funding Beijing’s development of sensitive technologies. The Biden administration is expected to soon unveil investment restrictions that would prevent U.S. capital from flowing to companies and startups in China that are developing cutting-edge technologies in sectors including advanced semiconductors.
The Problem With Letting Market Momentum Determine A Startup’s Valuation
“We’re letting the market price this round.” This line is often fed to founders in preparation for the notoriously tricky valuation question. It’s a negotiation tactic. You don’t want to pitch a price that may be off-putting, so you avoid giving an answer. But what does “letting the market price a round” mean? In warm markets, when capital flows freely and optimism is high, it means you are confident that interest in your startup will be sufficient to secure attractive terms. As a founder, you leverage market conditions to get what you want. Unfortunately for founders, it cuts both ways. In cooler markets, as we saw in the latter three quarters of 2022, letting the market price the round means downward pressure on valuation. It is a buyer’s market, and investors are likely to set terms further in their own favor.
Momentum for private debt funds is building
Two fund managers have lined up a combined $10 billion in commitments to their flagship private debt vehicles, underscoring investors' growing appetite for private market loans. Los Angeles-based manager Crescent Capital Group raked in a total of $8 billion to make private loans to mid-sized companies. Crescent raised the money across a levered fund and separately managed accounts. The fund, the eighth vintage of the strategy, will focus on making unitranche loans, secured second-lien debt, and junior debt to private equity-backed companies in the middle and upper middle market. New York-based credit shop Willow Tree Credit Partners has also closed a $2.4 billion fund that targets senior secured loans in middle-market companies that are either family-owned or backed by a PE firm. Willow Tree closed the fund above its target.
Artificial Intelligence In Agtech Is Blooming
Artificial intelligence has been a hot topic in recent months thanks to OpenAI’s ChatGPT. While everyone is marveling at the technology for passing law exams, AI has long had the ability to feed us. Source.ag, a Netherlands-based agriculture tech startup, announced on Thursday it raised a modest $23 million Series A funding round for its AI platform that predicts the best growing conditions for greenhouse plants. AI has been deeply seeded in agtech for a long time. At least $400 million poured into AI-powered agtech startups in 2022 per Crunchbase data, though I suspect the number is higher based on how ubiquitous AI applications are in the space. Due to the irregularities of climate change, extended drought seasons and supply chain issues, feeding the world’s 8-billion-and-growing population is perhaps one of the most pressing problems of our time. These factors add to the rising cost of food. That’s where AI comes in — several companies use it to predict weather conditions, adjust and save water, and detect diseases that can kill crops.
How equity in tech companies works
Let’s say you are exploring new tech roles and are fortunate to be reviewing different offers. Less fortunately, comparing the offers against one another is really challenging. How do these equity packages work? How do you value and compare the equity? And how do you not make a mistake when getting paid in equity?
It’s no secret that working for technology companies can be very financially lucrative. Many tech companies, unlike in other industries, offer equity as part of their employee compensation plans. This instrument has resulted in billions of dollars of wealth creation and a bonanza for employees who were lucky enough to join a company and see their stock rise with its success.
PE withdrawals distance Russia from global investment flows, tech promise
The exodus of most of the world's private capital from Russia in the year since it invaded Ukraine has created long-term liabilities for Russia, undermining aspirations for innovation and diversification of its commodity-centric economy. In 2022, the value of investment in Russian companies by nondomestic private equity and venture capital firms plunged 93.1% year over year to just $42.9 million, the lowest in at least five years, according to S&P Global Market Intelligence data. Coupled with an array of international sanctions that are prompting skilled workers to flee and limiting Russia's access to economically important technologies, the consequences of the war have been a big step back for "an economy that desperately needs modernization," said Lilit Gevorgyan, a Russia analyst for S&P Global Market Intelligence.
VC Dollars To Black Startup Founders Fell More Than 50% In 2022
After receiving a record $5.1 billion in venture capital during the height of the market in 2021, Black-founded startups based in the U.S. saw that number more than halved as VCs pulled back significantly last year. While venture funding in the U.S. overall dropped nearly a third in 2022 — from about $337 billion to roughly $214 billion — Black-founded startups were hit disproportionately by the decline, Crunchbase data shows. Such startups saw their share of the market drop from 1.5% in 2021 to only 1.1% last year. In general, Black-founded startups in the U.S. have struggled to gain anything above 1.1% of the venture market in the U.S. for the last several years. “It’s like they say, when the U.S. economy has a cold, the Black community has pneumonia,” said Paul Judge, managing partner and co-founder of Atlanta-based Panoramic Ventures, which invests in emerging markets and diverse founders. “So the numbers are not surprising.”
Tech Layoffs Are Feeding a New Startup Surge
Hundreds of thousands of workers lost jobs at Google, Meta, and other giants in recent months. Some are deciding to build their own companies.
HENRY KIRK ALWAYS thought he would eventually leave his job as an engineering manager at Google and start his own company. But when he became one of the 12,000 employees let go by the tech giant in January, he decided his time had come—albeit in an earlier and unexpected fashion.
Kirk and five others laid off from Google are now working on launching their own software design and development studio. He announced his ejection from Google and the new venture in a LinkedIn post that garnered more than 15,000 reactions. Kirk says he’s received a staggering 1,000 messages since making the post from people looking to work with the new agency or simply wishing him well on his attempt to conjure opportunity from a setback.
China looks to spur PE investment in fragile real estate market
China has launched a pilot program intended to open its real estate market to private equity funds and foreign investors, marking the country's latest effort to revive its housing market. The country's Securities Regulatory Commission said Monday that the program will allow qualified PE investors to raise funds for investment in residential and commercial real estate markets, as well as in infrastructure projects. Foreign investors are also encouraged to participate in these funds through the Qualified Foreign Limited Partnership program, which allows licensed international funds to invest in China's financial markets, the securities watchdog said in the statement. Investors in the pilot program, which will be primarily institutional, are required to commit at least 10 million yuan (about $1.45 million). Capital raised from individual investors is not allowed to exceed 20% of a fund's total.
DAOs Don't Have to Be Completely Decentralized
Broadly speaking, the value of DAOs is rooted in the idea of the “global village,” i.e., the capacity to coordinate trustlessly at a global scale. At the highest level, we see three types of DAOs emerging in today’s landscape: Capital allocation DAOs bring groups of people together to provide liquidity, vote on the allocation of that liquidity and (ideally) distribute rewards back to the community. Social DAOs are typically organized around a token and promise companionship, networking, learning and collaboration for the community. Governance DAOs are typically organized around major financial applications in which token ownership automatically grants “membership” (i.e., voting rights) in the DAO and the right to influence the direction of the protocol.
Are Startup Investors Weary Of The American Consumer?
American consumers are used to brands catering to our every whim. From footwear to skincare to pets, stores and warehouses are stuffed with products targeting every conceivable demographic, however bizarre its tastes. Pet ketchup? Snail slime eye masks? Zebra print goldfish platform shoes? Any of those things are available with a few clicks. And if current selections aren’t enough, rest assured founders and product designers will continue to churn out new seasonal offerings at a dizzying pace. But lately, startup investors don’t seem to be biting. Per an analysis of Crunchbase data, investment in U.S. nonfood consumer products startups has fallen off a cliff. So far this year, they’ve pulled in barely over $150 million across surveyed categories — on track for the lowest quarterly total in years.
IMF says no crypto as legal tender — Community disagrees
The International Monetary Fund (IMF) recently made another anti-crypto move, opposing crypto becoming a legal tender. In response, crypto community members quickly fired back and expressed disagreement on Twitter. The IMF’s executive board recently endorsed a crypto asset policy framework that did not grant crypto assets an official currency or legal tender status. The executives agreed with the framework and highlighted that it’s a necessary move to safeguard monetary stability. From expressing their support for Bitcoin to comparing the situation to other technological advancements, various community members fired back at the IMF’s attempt to discredit crypto as a legal tender.
Top venture capital fund calls on its companies to move most cash out of Israel
Citing judicial overhaul and illiberal policies, Bessemer Venture Partners warns of a ‘new era of instability’ ushered in by an ‘unrestrained government’
One of the major investors in the Israeli hi-tech sector, Bessemer Venture Partners, issued a stark warning Sunday evening to its companies in Israel that they should consider moving cash and foreign currency out of the country’s banking system.
Since 2007, BVP has invested over $1 billion in some of Israel’s leading hi-tech companies, including Fiverr, HiBob, Yotpo, MyHeritage, and Wix.
Indian consumer internet sector raised US$15.4 billion PE/VC capital across more than 500 deals in 2022
EY, the leading professional services organization, today announced its latest edition of the e-commerce and consumer internet sector trendbook, in collaboration with IVCA (Indian Private Equity and Venture Capital Association) and PeerCapital. The report was launched on the sidelines of the IVCA Conclave 2023. The report highlights investments, financing stage, M&A and market consolidation and the outlook for over 14 subsectors within the e-commerce and consumer internet sector. The internet and e-commerce sector in India has emerged as one of the fastest-growing sectors in the country, with growth further accelerated by the shift in consumer behaviour post-pandemic.
Crypto Lobbying Needs a Reset: More FTC, less SEC
Is there a method to the SEC’s madness? Of all the Securities and Exchange Commission’s actions against crypto entities that have stirred the industry’s ire, the agency’s recent move forcing New York-based Paxos to cease issuing its partner Binance’s BUSD stablecoin is the most deserving of an outcry. How, critics rightfully asked, can a token that’s explicitly designed not to fluctuate in price be considered a security? But a recent account in Fortune suggests the SEC may not have been thinking of securities law at all in that action. Binance was automatically converting competitor-issued stablecoins held by its exchange’s customers’ into BUSD. To me, that looks like an antitrust concern, not one of BUSD being a security.
Young VCs thought the good times would never end. They did, and now they're pissed.
On tap, we've got stories on JPMorgan cracking down on ChatGPT usage, why you might get laid off by a robot, and (speaking of aging) the foods you need to try before you die.
But first, the (VC) kids are NOT alright.
20 people who matter in UK tech
As the British government unveils a raft of new tech legislation, politicians, civil servants, regulators and lobbyists are vying for influence.A raft of upcoming legislation aims to hold tech companies to account while encouraging investment and innovation. But that's a difficult balance to strike and critics fear new rules could hold back some of the U.K.’s most promising industries.
Britain has enjoyed a dominant role in European’s tech sector for a decade. But investment in the U.K. fell by 22 percent last year, while rising in rival countries like France.
State of Private Markets: Q4 and 2022 in review
The global economy took a downward turn in 2022, leaving behind 2021’s environment of easy money and soaring valuations. The U.S. venture capital market followed suit. Venture deal count for private companies on Carta in 2022 declined 29% year over year, while the value of those investments fell more than 50%. Both of those annual figures had increased each of the prior five years.
There were plenty of other shifts in the venture market in Q4. Investments worth less than $5 million became more common, while mega-deals fell out of favor. The frequency of bridge rounds boomed. And deal sizes are decreasing at nearly every stage of the startup lifecycle.
TechScape: Google and Microsoft are in an AI arms race – who wins could change how we use the internet
Search engines have been a major part of our online experience since the early 1990s, when the booming growth of the world wide web created a need to sort and present information in response to user queries.
The first users to traverse the “information superhighway” had a simple job of it. It was akin to pootling along to your local supermarket: you knew the roads, where to turn off, and how to get there.
But the exponential growth of the web meant that it quickly became impossible for people to remember where they’d found that pertinent bit of information they wanted. The main road became ensnared in a spider’s web of byways. New crossings, roundabouts and turnoffs appeared. Streets you’d driven along for ages led to dead ends. Others changed course.