Zebeth Media Solutions

EC venture capital

The lack of VC funding to women is a Western societal shortfall • ZebethMedia

By zebethcontrolPosted on Posted in EC DEI, EC venture capital, Europe, Startups, Venture, venture funding, womenNo Comments on The lack of VC funding to women is a Western societal shortfall • ZebethMedia

The issue of women startup founders not receiving equitable venture funding is a shortfall of the West: It’s here, everywhere in the U.S., and over there, all throughout Europe. It’s hard to say that some of these metrics represent investors simply pulling back when data shows the bias has historical precedence. Even in 2008, all-women U.S. founding teams raised 1.2% of all venture capital, according to PitchBook data. In 2012, they raised 1.8%, then 1.7% in 2016. If anything, 2021 was the anomaly, which saw 2.3% of venture dollars allocated to all-female U.S. teams. Today, that number is tracking at 1.9% so far, which is nearly on par with what, typically, always has been. That the solution is so simple — cutting more checks to women — highlights the discriminatory ideological strongholds that our society continues to impose on us. In Europe, the story is quite similar, although 2020 was the standout year that saw women raise 2.4% of all venture capital on the continent. Last year paints a more realistic picture: All-women teams raised only 1.1% of all venture funds in Europe, a number on par with what they raised in 2017, 2018, and 2019, which saw these teams pick up 1.5%, 1.8%, and 1.5% of all venture capital, respectively, as previously reported by ZebethMedia. The inequality gap is failing to move in a meaningful direction. It’s no coincidence that our societies, with frameworks and ideological mores hand-crafted with sexism and misogynoir, have made little progress toward equitable change. There are two concurrent narratives here: In one, the data reflects how investors, the men in charge, truly feel about economic gender equality. At the same time, the numbers are a byproduct of our Western society, one that is still beholden to excluding and devaluing women, one that relishes their treatment as second-class citizens, rendering their dreams irrelevant.

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Where will it be deployed? • ZebethMedia

By zebethcontrolPosted on Posted in Column, EC Column, EC venture capital, Startups, Venture, Venture capital investment, venture capital trendsNo Comments on Where will it be deployed? • ZebethMedia

Jeremy Abelson Contributor Jeremy Abelson is the founder and lead portfolio manager of Irving Investors. Combining his experience as an operator and institutional investor, Abelson runs Irving as a multistrategy platform making long-term durable investments in both the public and private markets. More posts by this contributor What am I worth now? For the first time in 4 years, profitability beats growth Jacob Sonnenberg Contributor Jacob Sonnenberg is a portfolio manager at Irving Investors and runs Irving’s Technology and Consumer Crossover Fund. More posts by this contributor What am I worth now? For the first time in 4 years, profitability beats growth Venture fundraising has continued at a robust pace, but much less cash is being deployed. Let’s start with a few headlines: Bessemer in September raised about $3.85 billion for early stage startups, the largest vehicle in the firm’s 50-year existence. Insight Partners in February raised over $20.0 billion, double its predecessor fund (closed in April 2020 at $9.5 billion). Lightspeed in July raised more than $7 billion across four funds for seed to Series B rounds. Battery Ventures in July raised over $3.8 billion with a broad mandate. Founders Fund in March raised over $5 billion across venture ($1.9 billion) and growth ($3.4 billion) funds. a16z in May raised about $4.5 billion in its fourth fund targeting blockchain, bringing its total funds raised for blockchain-related companies to more than $7.6 billion. a16z separately closed $9 billion in fresh capital in January, with $1.5 billion allocated to biotech investments. Tiger Global is rumored to be raising PIIP 16 in what could be an around $10 billion vehicle and its second largest fund ever. The public markets have seen an extreme valuation recalibration, and it’s effectively trickling down into the private markets. All the while, crossover funds and VCs have been watching from the sidelines — capital deployment is in somewhat of a “wait and see” mode. The net/net: More dollars being raised with less deployed equals materially higher cash balances. Image Credits: Irving Investors What the numbers tell us Capital raising Venture capital fundraising has remained somewhat constant this year. VC firms have raised a total of $122 billion so far this year, and are on pace to finish the year with $172 billion. Short-term valuation “work arounds” can become much bigger long-term problems. That’s 20% less than 2021 ($214 billion), a touch below 2020 ($180 billion), and about 11% less than the $194 billion average raised annually since 2019. This strong level of fundraising is in stark contrast to the poor performance of high-growth names in the public markets. For instance, our high-growth SaaS bucket has suffered losses of about 60% to 80% or more. Image Credits: Capital deployment Total capital deployed by VCs in Q2 2022 and Q3 2022 has rapidly declined and now averages just $39 billion per quarter. This is on track to be the lowest reading since we can pull the data from 2017. Currently, capital deployed in Q3 2022 (less than $40 billion) is on pace to be about 70% below Q4 2021 levels (about $118 billion).

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The seas are getting even rougher for Chinese startups • ZebethMedia

By zebethcontrolPosted on Posted in China, Chinese venture capital, EC East Asia, EC News Analysis, EC venture capital, startup fundraising, Startups, VentureNo Comments on The seas are getting even rougher for Chinese startups • ZebethMedia

The third quarter was far from favorable for Chinese startups looking to raise money. Data shows that for upstart tech companies in the country, Q3 2022 was the worst time to raise venture capital since Q1 2020, with far less capital invested than either the rest of 2020 and 2021, or for most of 2018 and 2019. China is hardly alone in seeing its domestic startup scene see slowing capital inflows, but recent news puts the country-specific information into new context: Given today’s Chinese tech share sell-off, there is fresh pressure on technology companies’ valuations in the country, and that could impact startup fundraising. If China saw fundraising decrease 10% in Q4 2022 from Q3 2022 — measured in dollar terms, not the number of funding events — we’d see startups facing the slowest quarter since the onset of 2018, according to CB Insights data. A steeper decline would put Q4 2022 as the nadir in the nation for the last five years. Why are Chinese tech stocks suffering today? After a period when the sale of the nation’s equities onshore was at least somewhat meddled with, the value of major and minor Chinese tech companies fell today in the wake of the Chinese Communist Party’s every-five-year confab. This time ’round, current Chinese Premier Xi Jinping secured not only another five years in power, he also solidified a cabinet of like-minded allies. The context is clear: The Xi method of managing China remains ascendant. And investors in tech companies, still licking wounds brought on by a regulatory barrage led by Xi — which included some reasonable ideas like dismantling certain anti-competitive practices along with some less enticing policies — are not enthused. The result? A bloodbath (American share price changes as of the time of publishing):

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Why Q3’s median valuations actually make perfect sense • ZebethMedia

By zebethcontrolPosted on Posted in EC venture capital, PitchBook Data, startup valuations, Startups, Venture, venture capitalNo Comments on Why Q3’s median valuations actually make perfect sense • ZebethMedia

Valuations have been top of mind for the entire venture industry this year as many VCs try to navigate their overvalued portfolios and founders scramble to conserve cash and grow into their lofty valuations. So one might have predicted that valuations would fall off a cliff this year. But that hasn’t happened because venture investing just isn’t that simple. First, let’s look at the numbers: According to PitchBook data, the median seed deal pre-money valuation in the United States was $10.5 million, up from $9 million last year. The median early-stage valuation through the third quarter of this year was $55 million, up from $44 million last year. The median late-stage valuation was $91 million, down from $100 million in 2021. It might seem silly that valuations are continuing to climb for some stages — especially after investors made it seem like they were crazy for coming in at last year’s prices, and, of course, in some ways, it is — but it also makes a lot of sense. Kyle Stanford, a senior venture capital analyst at PitchBook, told ZebethMedia that for one, we can’t forget about those record levels of dry powder. “There has been such growth over the past few years of the multi-stage investors or Andreessen [Horowitz] and Sequoia that have billion-dollar funds investing in early stage,” Stanford said. “The amount of capital that is still available for early stage is still really high and a lot of investors are still willing to put top dollars into deals.”

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VCs continue to pour millions into independent beverage startups • ZebethMedia

By zebethcontrolPosted on Posted in beverages, Commerce, EC Ecommerce and D2C, EC venture capital, eCommerce, Startups, Venture, venture capitalNo Comments on VCs continue to pour millions into independent beverage startups • ZebethMedia

After seeing a ton of venture capital investment flow into independent beverage startups recently, it was time to take a step back and see if this kind of company actually made sense as a venture investment. For one, the competition for space on grocery store shelves is fierce, eclipsed only by the fact people are finicky. The U.S. Beverage Manufacturing and Filling Locations Database contains nearly 2,500 alcoholic and nonalcoholic beverage manufacturers making everything from beer and soft drinks to coffee and 10,000 flavors of fizzy water. Within the whole beverage sector, functional beverages grew in popularity over the past five years as consumers sought out better-for-you drinks. Most of them include add-ins like vitamins, probiotics and electrolytes and boast lower sugar content and more natural ingredients. This market is also growing fast: Precedence Research estimated the global functional beverages market was valued at $129.3 billion in 2021 and would grow nearly 9% annually through 2030, when it’s forecast to be worth $279.4 billion. These companies don’t usually go public, but often sell to another entity, perhaps a soda conglomerate or even an alcoholic beverage company looking to get into the nonalcoholic space. Opening a fresh can of capital If the amount of capital going into this area is any indication, investment into the sector makes sense. Venture capital firms pumped over $170 million into functional beverage companies in 2018, up $111 million from 2017, according to PitchBook.

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Black startup founders raised just $187 million in the third quarter • ZebethMedia

By zebethcontrolPosted on Posted in black founders, EC DEI, EC venture capital, funding, Startups, Venture, venture capitalNo Comments on Black startup founders raised just $187 million in the third quarter • ZebethMedia

The amount of capital raised by Black entrepreneurs continues to decrease. The latest Crunchbase numbers show that Black founders raised $187 million in Q3, a staggering decline from the nearly $1.1 billion they received in Q3 2021 and a sizable drop from the $594 million the cohort raised in Q2. Black founders raised just 0.12% of the $150.9 billion deployed in Q3. Within that, Black women raised 49% of all the capital allocated to Black founders in Q3, according to Crunchbase, pacing the number at around $91.63 million. To grab crumbs, it’s good, at least, to see that Black men and women appeared to receive nearly equal amounts of funding this quarter, even though the number they split is appalling. Frankly, there are homes worth more than $187 million. Adam Neumann raised more in one round than all Black founders could in one quarter. Adele is worth $220 million. However, these numbers are not necessarily surprising. ZebethMedia reported investors often retreat to their networks amid economic downturns, taking fewer risks on minorities. “When the venture capital industry catches a cold, underrepresented founders catch pneumonia.” Tiana Tukes, investor, Colorful VC Perhaps this is best exemplified by the fact that the capital raised by Black founders this Q3 is roughly on par with the $180 million allocated to the cohort in Q3 2020. However, Black founders were able to raise that $187 million from just 32 deals, compared to 2020, when it took 93 deals to hit $180 million. In total, Black founders have raised a little more than $2 billion in venture capital this year, a decrease from the stunning $4.72 allocated in the record-breaking year that was 2021.

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Will alternative investments become a staple in all investors’ portfolios? • ZebethMedia

By zebethcontrolPosted on Posted in alternative investments, EC venture capital, Fintech, portfolios, vc interview, VentureNo Comments on Will alternative investments become a staple in all investors’ portfolios? • ZebethMedia

We no longer live in the era of the 60/40 portfolio, VC says A 60/40 investment portfolio, in which 60% is invested in stocks and 40% in bonds, was long considered classic. But that’s no longer the case, as many investors are now diversifying beyond publicly traded assets. Alternative investments, or alts, are a direct corollary to diversified portfolios. And they are not just for institutional funds: Individual investors too are showing increasing interest in this asset class, which encompasses all sorts of supports, from wine and watches to gold … and startups. Startups can be on the receiving end of investments into alts, but some of them have also facilitated this trend. California-based fintech VC firm Broadhaven Ventures invests in companies on the tech side of enabling alts, with a portfolio including Allocate, Alongside, Alt, Capital (known until recently as Party Round), Caplight, Carta, Latitud, Pipe, Republic, Syndicate and others. Talking to ZebethMedia, Broadhaven co-founder and partner Michael Sidgmore said that when investing in the sector, the early-stage fund has “focused on helping to build out the alts ecosystem by investing in many of the enabling technologies across various areas of alternative investments.” Sidgmore himself has spent a large part of his career in alts and launched a podcast and content platform called Alt Goes Mainstream in January 2021. We spoke with him about alts beyond crypto and what’s next for a space that’s seeing some of its tailwinds fade. His answers below were edited for length and clarity.

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Don’t let today’s software rally improve your mood • ZebethMedia

By zebethcontrolPosted on Posted in EC venture capital, Startups, stocks, tech stocks, Venture, venture capitalNo Comments on Don’t let today’s software rally improve your mood • ZebethMedia

After a rough year in the public markets, you might take today’s brilliant trading as good news. Any positive price movement is a win, right? Kinda. The tech-heavy Nasdaq Composite index rose 3.4% today, while other major U.S. indices jumped smaller amounts in a hall-of-fame start to the trading week. (That the markets are turning up for Disrupt is rather kind, I must admit.) Even more important to the tech industry, however, is sector-specific news. Observe: Good news? Sure, but only if you are into squashy cats. Let me explain. When the value of a particular commodity or security falls sharply, it often follows up its declines by bouncing back a little. If the underlying forces that drove the security negative remain in place, such rebounds often prove short-lived, and not indicative of the actual “bottom” of any particular trading range. This is often called, somewhat inartfully, a “dead cat bounce,” or more specifically, the sort of modest rebound that a cat’s corpse might manage if it hit concrete after falling from a high window.

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