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Venture Capital News - Venture Capital News Headlines

Venture Capital News - Venture Capital News Headlines

Venture Capital News - Venture Capital News Headlines

Limited Partners commitments to VC fund is at a decade lowest. VC funds lowering investment is only a part of the picture. LPs see limited cash returns and decrease their commitments. As such, VC investments will keep decreasing and startups will focus more on cash generation and profitability. For an investor, that will mean higher returns. For Startups, that will mean less or lower fundraising and more bootstrapping. Is it good for the economy? Only time will tell. Did the new trend benefited you? Or did it impacted your business model? Share it in the comments below. Thank you James Heath for sharing the data. Did you appreciate this post? Would you like to see more? Like this post Follow Hugues Hallot 🔔 Ring it on my Profile 🔝 Connect with me #investments #VC #VentureCapital #Startup

FOUNDERS: be wary of the “option pool shuffle”. It’s when a VC creates or increases the employee option pool BEFORE the round closes, which ONLY dilutes founders and existing shareholders, NOT new investors. It’s a sneaky way of reducing the valuation to a level lower than what it says on the term sheet. Its standard practice, so just make sure you understand the REAL valuation by calculating diluting from the option pool. DM me if you need help calculating how to do this 🤓

In an ideal world, bridge rounds wouldn’t exist. I fear that many bridge rounds are due to founders not knowing how to adequately plan their fundraises! Specifically, being able to plan backwards according to what investors in the NEXT round are looking for. I call this "The Capital Chasm." It is the mismatch between: 👉 The milestones that the founders’ are executing towards  VERSUS The milestones that the investors in the next round expect. 👈 So.... Founders must not plan their fundraises forwards, but rather backwards, by asking this question 👇 ✅ What value-inflection point is the next round investors requiring before they invest? ✅  

Venture Capital News - Venture Capital News Headlines

🔮 There aren't many LPs in the market right now, but those who are will reap the largest rewards 2023 had the lowest capital raised in a decade. Combine that with deployment speeds staying moderately high, GPs are going to be thirsty soon Simple supply and demand economics will pay dividends to LPs who continue to back VC Demand will continue. The pace of technology development is greater than ever. Talent is pouring into founder seats Supply is reducing. Tougher macro conditions have created an investor friendly market, which is great for LPs LPs who don't back VC vintages in 2024 and 2025 will look back with regrets not seen since 2001 #venturecapital #VC

When a company raises money from investors, it often issues different classes of preferred stock to each investor group (eg. Series A, Series B, Series C .. and so on). When the company's value is going up (called an "up round"), the newest investors might get superior terms and pay a higher price for their shares. Thereby, this latest round is considered as senior to the previous round of funding. This means they have a higher total value attached to their shares if the company gets sold or goes out of business. Usually, in the latest round of funding, when new investors are participating, they get superior rights. As they're investing when the company is doing well or has more clear growth potential. Existing investors could be willing to continue to fund the company per the terms of the latest round. The superior rights may be in form of having a liquidation preference greater than its purchase price, or having other economic and noneconomic rights. As rights and preferences differ across different rounds of investment, it's important to look at each class of preferred stock separately when undertaking valuation. #startupvaluation #preferredstock

Vesting is the process by which employees earn equity ownership over an extended period of employment, rather than getting it all upfront. The two main types are: 🔵 Time-based vesting: Equity vests incrementally, e.g., 25% per year over 4 years. This encourages long-term commitment. 🔵 Cliff vesting: There's an initial "cliff" period of 1 year before any vesting occurs. Then the remaining equity vests gradually. This prevents instant ownership for those who leave quickly. Vesting aligns employees' financial incentives with the startup's success. Granting full ownership piece-by-piece over years of commitment motivates talent to stick around, be invested in the company's trajectory, and strive for successful outcomes. #ThisIsMAGIC #Inspire #Equip #Amplify #VentureCapital