Dan Trajman’s Post

Summary: The article discusses the current venture firm fundraising market and the success of emerging VC firm A* in raising $315 million for its oversubscribed Fund II. It highlights the firm's focus on early-stage investments and its experienced founding partners. Key takeaways: Venture firms raised $9.3 billion in Q1 and it is unlikely that 2023's record-breaking total of $81.8 billion will be surpassed. A* has been successful in fundraising due to its focus on seed rounds and backing breakout companies in its portfolio. The firm's founding partners have a strong track record and diverse experience in different industries. Counter arguments: The article mentions that emerging managers are feeling the frost in the fundraising market, suggesting that not all emerging VCs may be as successful as A*. While A* has found success in raising institutional investors for Fund II, this may not be the case for all emerging VCs. #venturecapital #vc #fundraising #startups #innovation

Not all VC funds are equal. This is precisely why I wrote my latest post for OpenVC on the top of the top VC firms. Because if you are going to get denied for funding, it is better to get denied by a Tier 1 fund. #startup #founders  #venturecapital https://lnkd.in/gm-Ps9QS

Increasing Numbers of VC's Are Heading for the Exit - What Should Founders Consider? Carta reports that in Q1 investors were 70% of secondary sellers, up from 50% in Q4 of 2022. These are very different sales from venture employees looking to cash out some of the appreciated equity. Here are some things for founders to consider: ➡ Investor Relations: Founders should communicate with their investors and understand their reasons for selling in the secondary market. It's important to maintain a positive relationship with existing investors and address any concerns or questions they may have. ➡ Selling Restrictions: Share transfers may be subject to rights of first refusal and other restrictions or conditions. Further, these transactions must comply with securities laws and regulations.  Founders should consult with counsel in advance of any such transaction. ➡ Ownership and Control: Secondary transactions have the ability to alter the “balance of power” on company boards and the voting of share classes.  ➡ Valuation: Even assuming sale prices remain confidential, some secondary sales can impact the valuations for tax (409A) and accounting (ASC 718) purposes. ➡ Information Disclosure: When investors sell shares in the secondary market, they may disclose sensitive information about the company to potential buyers. Founders should ensure that confidential information is protected and that the selling investors adhere to non-disclosure agreements. ➡ Stakeholder Messaging: Even if the sale price is not disclosed, secondary sales in this transaction create significant “signaling risk.” Founders need a proactive communication strategy for remaining investors, employees, customers and partners. ➡ Understand the Buyer: There are a broad spectrum of secondary buyers. Sometimes the sale occurs in the context of a VC’s sale of an entire portfolio – in this case, the Buyer may have limited interest in many of the portfolio companies. At the other end, a Buyer may have a strong interest in the specific company, have significant new funds to invest and are taking advantage of the opportunity to buy at a discount. ➡ Mitigation Strategies: Consider implementing strategies to mitigate the potential negative effects of secondary market transactions. Although founders often have limited leverage in such situations, they often remain key to a venture’s success so options should be explored. #venturecapital #secondaries

The hunt for liquidity is more apparent than ever in private secondary markets and attention is beginning to turn to venture capital. Firms are seeking opportunities to provide liquidity in this largely underserved area of the market. Industry Ventures, for example, is offering a range of liquidity solutions via a recently closed $1.45bn flagship secondary fund, its tenth to date. The fund has scope to acquire LP interests in VC funds, back continuation vehicles, and acquire direct stakes in later-stage companies on a secondary basis.  VC secondary deals offer larger discounts than private equity secondaries, which goes some way to explain why deal volumes have been lower. However, Hans Swildens, CEO and founder of Industry Ventures, notes that activity has begun to pick up pace since last year and that the market is at the beginning stages of what he believes is a normalization process, as reported by PitchBook. There is a growing need for cash among investors in venture capital funds and it’s evident that the secondary market is becoming an increasingly viable solution. Read the full press release here: https://lnkd.in/dCugCwxY #VC #secondaries #venturecapital #privateequity

Seven predictions for US #VC in 2024 from Pitchbook 🎉🎯 - Venture #fundraising is expected to increase slightly over 2023 - Startups' existing investors will maintain their amped-up role in leading deals. We expect outsiders to offer some relief as nontraditional investors reenter the asset class. - The number of #unicorn companies and their collective valuation is set to decline as more are forced to raise capital.  

Flash Info #255- Capital Market Angel Investors and Venture Capitalists. Angel investors are typically high-net-worth individuals who invest their own money directly into early-stage startups. They tend to have an entrepreneurial background themselves and often take a hands-on approach, providing mentorship and guidance to the founders they invest in. Angels usually invest smaller sums, anywhere from $25,000 to $1 million, in exchange for an equity stake in the company. Venture capitalists (VCs), on the other hand, manage funds that pool money from institutional investors like pension funds, endowments, and family offices. VCs generally focus on later-stage, higher-growth startups and invest larger sums, often in the millions or even tens of millions. They typically take a more passive role, but can leverage their extensive networks and industry expertise to help portfolio companies scale. The key differences are: - Funding source (personal wealth vs. institutional funds) - Investment size (smaller vs. larger) - Involvement level (hands-on vs. more passive) - Investment stage (earlier vs. later) #CapitalMarkets #PrivateEquity #InvestmentGroup #FinancialMarkets #moneymarket #ECMA #founders #ethiopiadiaspora

There is increasing pressure on VC firms to generate returns in an era of higher (for longer!) interest rates - - Money raised by US VC firms has dropped 72% during the first 9 months of this year compared to the same period last year [Pitchbook] - 2020 vintage VC funds have a median IRR of 13% [Cambridge Associates] OpenView Venture Partners, a Boston-based VC firm, with an AUM of $2.4B, will shut down soon - its sixth fund, raised in 2020, had a net IRR of -10%. It is backed by MIT, Florida's State Board of Administration, and the Texas County & District Retirement System, amongst others. #venturecapital #startups #venturefunding #startupfunding #startupinvestment #vcfunding #vcinsights https://lnkd.in/g-zJpGzP

From the whirlwind of 2021's booming #VC landscape to today's paradigm shift, the world of #venturecapital has undergone a significant transformation, reshaping the dynamics for both founders and investors 📈 As the VC market resets, this insightful Forbes article delves into the repercussions of investing during peak valuations, the evolving nature of VC support, and the changing tides of venture capital. Amidst the changing landscape, #earlystage founders are advised to choose their VC partners wisely and embrace the challenge while adapting to the ever-evolving VC landscape for a stronger #startup future 💪 https://lnkd.in/gb5f6kgZ #venturecapitalist #VCfunding #VCfund

🚨 Venture Capital Alert: Fundraising Takes A Dive to a Six-Year Low! 📉 Discover why the VC industry raised only $8.8 billion in Q1 - a steep 37% fall from Q4 2015. Uncertainty looms, yet $17.5B has flowed into US startups, signaling a strategic shift. Learn more about this cautious capital commitment trend and its implications for entrepreneurs and investors alike. #VentureCapital #MarketTrends #StartUpInvestment #EconomicInsight ➡ Dive into the full analysis in my latest blog post!

2 Predictions for US VC in 2024  PitchBook sees moderate improvements on the horizon for the US VC ecosystem on the back of economic strength and signals of easing rates. - Venture fundraising is expected to increase slightly over 2023, yet continue to fall short of recent years.  - The number of #unicorn companies and their collective valuation is set to decline as more are forced to raise capital.   Actually, I'm a bit more bullish. What are your thoughts? #startups #VC #funding Mind the Bridge