I'm Kiani from Inside.com, and this week, we asked our Inside Venture Capital community, "What are the biggest challenges founders should be aware of when raising their first round of funding?" We received dozens of responses from our insightful Inside members. ⭐️ Due to all the great advice given in one place, I recommend any founders thinking about funding check out all the tips from other founders, CEOs, and investors here. :) Here are some highlighted responses we received: - Derrick Richardson, Founder and CEO at Arthawk Entertainment Inc., took the time to share seven helpful articles and 15 constructive books with Amazon links for us. Thank you for doing that, Derrick!
- David Gastelum, Founder of DASH, shared his journey, writing, "I am hesitant to share emotion, but in this forum of other first-time founders, I hope my sharing will help … Whatever obstacle you face, it starts with you. You have to soul search, be willing to learn to be a new you if need be." Thank you for being vulnerable with us, David.
- Dhiraj Perkash Goel, a founding partner at GetFresh Ventures, listed in detail what each slide of your pitch story should contain. I highly recommend checking out Dhiraj and his post here.
- Matt Wilson, Founder and Managing Director at Allied Venture Partners, had a unique twist to his answer, listing out three angel investor archetypes to avoid at all costs: the Wannabe, the Follower, and the Control Freak. Read more on Matt's dive into those here.
We're looking for active members in the community to be featured in our newsletters. We may shout out your name and business or reach out for more about you! ⭐️
| |
An increasing number of venture capital firms are investing in stock markets due to a lack of private market deals, according to Pitchbook. Such firms have received backing from some of their limited partners, despite the higher fees charged by VCs. VCs typically charge 2% or higher management fees to their limited partners. More: - The majority of limited partners already invest in public equity through traditional asset managers.
- Due to scarce startup deals, limited partners' committed capital to VCs is lying dormant.
- Hence, many venture firms are increasing their investments in stock markets.
- Notable venture firms, such as Andreessen Horowitz, Sequoia, and Bessemer, have registered as investment advisors in a bid to allocate more than 20% of their funds to public equity and digital assets.
- Limited partners believe that because VCs invested in the company when it was private, they could evaluate its strategy, management, and growth potential.
- Brijesh Jeevarathnam, global head of fund investments at Adams Street Partners, believes that such investments will help limited partners "earn a very attractive venture-like return" in a three- to five-year span.
| |
The venture capital winter is forcing technology startups to secure venture debt, per Bloomberg. Startups are considering both conventional and convertible debt as the number of down equity rounds starts increasing. Investors are advising portfolio startups to take on debt in a bid to avoid markdowns on valuations. More: - Reaction founding partner Cynthia Nadal said, “We want to limit the markdowns in our portfolios, so we’re also the first to encourage our own portfolio companies to consider debt as a valid option, much more than we used to.”
- Venture debt typically has a coupon rate of 9% to 10%, according to Kreos Capital.
- Startups can avail either conventional debt or convertible debt.
- The latter is a type of bond that converts to equity at a later date.
- Peloton and Just Eat Takeaway.com most recently secured convertible debt facilities at zero coupon rates.
- Silicon Valley Bank, the market leader in venture debt, is in talks to raise a $2B venture fund.
Zoom out: - Startups in the U.S. availed $17.1B in venture debt in the first half of the year, up 7.5% from the same time in 2021.
| |
Venture capital deployed into metaverse and AR / VR startups continued to slump in Q3 2022. The three-month period ending in September saw $759M invested in the sector from 71 funding rounds. The funding was only about a third of the $2.14B invested in the sector in Q4 last year. More: - Funding has declined QoQ since Q4 2021, dropping to $1.3B in Q1 2022 and to $956M in Q2 2022.
- At 2022 year-end, the funding is expected to cross 2020’s yearly total of $3.6B.
- However, it is unlikely to reach 2021’s total of $4.5B.
- In spite of the drop in funding in 2022, seven mega funding rounds of more than $100M were completed.
- In February, Swiss AR-based barcode scanning tools developer Scandit cemented its unicorn status with a $150M Series D funding round.
- Metaverse platform for pro-athletes LootMogul nabbed $200M in September.
- Other notable funding rounds include Genies’ $150M Series C and Mindmaze’s $105M financing.
| |
JPMorgan & Chase Co. strategist Nikolas Panigirtzoglou predicts a longer crypto market slump, judging by the continued venture funding retrenchment in the sector. Venture funding for the crypto sector declined to less than half of the totals seen in Q1 2022. More: - In the first quarter of this year, the crypto sector has nabbed over $10B in venture funding.
- In the third quarter, venture funding investments totaled $4.4B.
- Panigirtzoglou's team said, "This is a concerning development as it shows reluctance by VC funds to deploy capital into the digital-asset space, increasing the likelihood that the current weakness in crypto markets would be long-lasting."
- Market values of digital assets have slumped 56% this year, with the tightening in monetary policy driving down digital asset values even further as investors shy away from riskier investments.
- Crypto exchange Coinbase Globals CFO Alesia Haas mirrored Panigirtzoglou's views, saying that "headwinds could persist or possibly intensify."
| |
Toronto, Canada-based investment firm Kensington Capital Partners announced a third fund-of-funds. The firm plans to raise $290M in capital for the fund. Kensington intends to invest in other Canadian venture funds. More: - The Canadian government's Venture Capital Catalyst Initiative (VCCI) will contribute 25% of the fund's total capital, equating to $72.5M.
- VCCI backed the firm’s other two funds as well.
- The third fund is almost double Kensington’s second fund, which received $150M in capital commitments.
- Kensington has reportedly deployed $1.5B in venture capital to date.
Zoom out: - The Canadian government estimates the collective investment pool to be worth $1.4B.
- VCCI will also invest in three other fund-of-funds, namely HarbourVest Partners, Teralys Capital, and Northleaf Capital Partners.
- They last raised funds worth $326M, $400M, and $300M, respectively.
| |
E-bike manufacturer Aventon is raising new financing, per the Information. The size of the round was not disclosed. Sequoia Capital China is reportedly leading the funding round. More: - Aventon's post-money valuation at the new financing is $590M, almost thrice the firm's $200M at its previous fundraising eight months ago.
- Aventon's bike retails for $1,000 to $2,000.
- The U.S.- and China-based e-bike manufacturer was able to hit $100M in revenue in 2021.
- Aventon's peers Urtopia and VanMoof raised $10M in seed funding and $128M in Series C funding.
- Utopia's funding round was led by DCM Ventures and Lightspeed China Partners.
- VanMoof's fundraiser was led by Hillhouse Capital Group.
Zoom out: - Deloitte reports that e-bike sales in North America and Europe topped 6.4 million in 2021, up 21% from the previous year.
| |
Quick Hits: - Whether you're planning to travel, or just feeling the itch to learn something new, now's the time to start speaking a new language with Babbel. Plus, for a limited time you can get 55% off.*
- Venture-backed Pakistani online insurance startup Waada acquired its competitor MicroEnsure Pakistan. Waada raised $1.3M in seed funding from VCs and angel investors.
- Korea's Ministry of SMEs and Startups proposed establishing a fund-of-funds, which would be backed by the government but led by the private sector. In addition, the ministry proposed setting up incentives for VCs and easing regulations on venture fund investments into publicly listed companies.
- Cooperative Ventures, a venture capital fund formed by agricultural cooperatives CHS and Growmark, announced its first investment in autonomous tractor maker Sabanto.
- Cambridge, Massachusetts-based biotech firm hC Bioscience raised $16M in Series A extension funding, bringing the total under the Series A round to $40M.
- Web3-focused venture capital firm Rockaway Blockchain Fund rebranded to RockawayX.
- Traditional dog food is packed with harmful filler ingredients. Vet Approved healthy dog food brand "Nom Nom" is offering 50% off a two-week trial to ensure your pup is happy and healthy.*
*This is sponsored content.
| |
Upcoming Events: - November 09 - Synthetic data for more efficient, robust and ethical model development - Live AMA with Yashar Behzadi (CEO and Founder of Synthesis AI)* (Register Here)
*This is a sponsored listing.
| |
 |  | Karan Chafekar is a Management Consultant, Business enthusiast, and Licensed Pilot. | | | | Editor | Aaron Crutchfield is based in the high desert of California. Over the last two decades, he has spent time writing and editing at various local newspapers and defense contractors in California. When he's not working, he can often be found looking at the latest memes with his kids or working on his 1962 and 1972 Fords. | |
Comments
Post a Comment