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From Ashes to Riches: How Startups Secured $3B in Venture Debt Revival

The collapse of Silicon Valley Bank (SVB) sent shockwaves through the venture debt market, plunging it into a deep abyss. Venture debt, a lifeline for many startups, saw a staggering $7.7B decline in the first half of 2023 compared to the previous year. Early-stage and pre-seed to seed startups faced the brunt of this downturn, with venture debt plummeting by a whopping 57% and 59%, respectively, according to the Wall Street Journal. But like a phoenix rising from the ashes, the venture debt market staged an incredible comeback in the second half of 2023. According to Pitchbook, banks and non-bank lenders provided U.S. startups with a staggering $3B more in venture debt compared to the first half of the year. The catalyst for this revival was a recovery in public equities and a growing belief that interest rate hikes might plateau. With economic conditions stabilizing, banks regained their appetite for […]

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The State of VC Funding for Women-Founded Startups in Europe: A 2023 Overview

The State of VC Funding for Women-Founded Startups in Europe: A 2023 Overview

How much are venture capitalists (VCs) actually investing in women? In 2023, startups across Europe founded or co-founded by women have raised a noteworthy €5.9 billion in venture capital (Dealroom). While this figure represents 9.6% of all venture capital raised in the region, it underscores both progress and stagnation in funding gender diversity. The proportion of venture capital flowing to women-founded startups has experienced significant growth over the past decade, doubling to its current share. However, this growth narrative meets a plateau, with the investment share hovering around 10% since 2017. Despite the stagnation, the landscape of women entrepreneurship is far from static. The past decade has witnessed a tenfold increase in the number of women-founded unicorns in Europe, reaching a total of 35. This milestone not only showcases the scalability and market relevance of these enterprises but also aligns the current number of women-founded unicorns with the total number […]

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2023: A Year of Strategic Hiring and Record Layoffs in Tech Startups (Carta)

2023: A Year of Strategic Hiring and Record Layoffs in Tech Startups (Carta)

In 2023, the startup ecosystem experienced a significant shift in hiring practices, marked by increased scrutiny from founders on new hires. This change was part of a broader trend that saw the tech industry grappling with a record number of layoffs, leading to an overall contraction in the asset class over the previous 12 months. This development represents a stark departure from the explosive growth during the boom period of 2021 and 2022, when Carta companies alone added more than half a million new employees. The past year’s hiring statistics present a clear picture of the changing dynamics. Carta startups saw only 268,000 new hires, a substantial decrease from the previous years, while 286,000 employees departed, whether by choice or through reductions in force (RIFs). It’s important to note that these figures primarily track employees receiving equity, which increasingly represents a majority within tech startups. What Led to the Shift?Two […]

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European Startups Navigate Funding Landscape: AI and Climate Tech Lead the Charge

European Startups Navigate Funding Landscape: AI and Climate Tech Lead the Charge

In 2023, European startups secured approximately $60 billion in venture capital (VC) funding, showcasing the continent’s dynamic innovation landscape. This funding performance, detailed in a report by global law firm Orrick, highlights the shifting tides of investment preferences and strategic adjustments startups are making in response to broader market conditions. Sector SpotlightThe artificial intelligence (AI) sector commanded a significant portion of the total VC funding, securing a 17% share. This indicates the growing importance of AI technologies across various industries. However, climate technology (climate tech) emerged as the frontrunner, overtaking AI in terms of investment popularity. The focus on climate tech underscores Europe’s commitment to sustainability and the growing investor interest in environmentally-focused innovations. Changing Dynamics in FinancingThere was a noticeable downturn in later-stage financing, attributed to founders exploring alternative financing routes or pivoting their business models towards profitability. This shift reflects the strategic adjustments companies are making in a […]

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Navigating Funding Challenges: Seed-Stage Startups Turn to Alternative Sources

Navigating Funding Challenges: Seed-Stage Startups Turn to Alternative Sources

The venture capital (VC) funding landscape has undergone a significant shift, with the economic downturn now affecting seed-stage startups—a group previously deemed somewhat immune to such financial squeezes. According to data from Carta, these startups are increasingly exploring alternative funding avenues to weather the storm. Seed Funding TrendsThe final quarter of 2023 marked a notable low in new seed investment rounds on the Carta platform, recording only 462 new rounds. This is the lowest quarterly figure since the first quarter of 2019, illustrating a stark downturn from the peak of 902 transactions observed in Q4 2021. Alongside the decline in transaction volume, median round sizes have also seen a reduction, falling from $3.5M in 2022 to $3M in 2023. Despite these challenges, there’s a silver lining with median seed stage valuations, which rose to $13.3M in Q4 2023, an 11% year-on-year increase. This suggests that while fewer deals are closing, […]

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2023 in Review: How Pre-seed and Early-Stage European Startups Outperformed in a Tough Year

2023 in Review: How Pre-seed and Early-Stage European Startups Outperformed in a Tough Year

In 2023, pre-seed and early-stage European startups showcased resilience and growth, defying the broader fundraising downturn. According to a recent Pitchbook report highlighted by TechEU, these startups not only survived but thrived, with pre-money valuations for pre-seed and early-stage ventures climbing by 4% and 2.5%, respectively. This growth comes in contrast to the overall cautious atmosphere pervading the investment landscape. The data reveals an intriguing trend across the startup lifecycle. While the median deal value for pre-seed, seed, early-stage, and late-stage startups recorded increases of 8.4%, 5.3%, 2.8%, and 11.7% respectively, seed-stage startups experienced a 9.2% year-on-year decline in valuations. This decline underscores the varied impact of market conditions on startups at different stages of development. Particularly noteworthy is the stark contrast faced by startups in venture growth stages, where both deal value and valuations witnessed declines of 4.7% and 26.6%, respectively. The report also sheds light on the exit […]

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Revolut and SumUp are profitable European unicorns

Revolut and SumUp are profitable European unicorns

Revolut and SumUp are the only two confirmed profitable companies among the 10 most valuable unicorn startups in Europe according to Pitchbook. In total, there are about 140 unicorn startups in Europe in terms of euros. Most of them became unicorns because they chose a hypergrowth strategy. As a result, most of them are operating at a loss. There are only two exceptions in the top 10. The first one is the British Revolut, which announced EBITDA of £45 million ($54 million) in Q4 2023. The second is mobile payment company SumUp, which reported a pre-tax profit of £1.2 million ($1.5 million) in its 2022 declaration.

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Bay Area is a paradise for pre-seed

Bay Area is a paradise for pre-seed

Carta specialists analyzed all the facts of attracting investments that were formalized with the help of SAFE or convertible bonds. We are talking about investments that took place before any significant venture rounds. That is, the sample includes both pre-seed and later seed. According to Carta, in 2023, 34.6% of all pre-seed funding rounds went to Bay Area companies. However, the picture changes slightly if we look at the deals themselves and their number rather than the capital. Small angel rounds of less than $1 million have become much more dispersed across the US geography.

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Unicorns in cybersecurity and artificial intelligence grew better than others in 2023

Unicorns in cybersecurity and artificial intelligence grew better than others in 2023

The value of unicorn startups in the cybersecurity and artificial intelligence sectors grew by 24.4% and 22.9%, respectively, last year. This is evidenced by the Morningstar Pitchbook Global Unicorn Vertical Indexes. Almost half of the new unicorns (44%) belonged to the artificial intelligence and machine learning sector. The pace of unicorn creation dropped almost threefold over the year, but the cumulative value of all unicorns backed by venture capital funds increased by 12.77%. There is a simple explanation for the growth in the value of unicorns in the two industries: a few companies set the tone for the entire sector. For example, the growth in the valuation of unicorn startups in the cybersecurity sector can be explained by the fact that Wiz is close to a $10 billion valuation. The artificial intelligence sector received a rising tide that lifted all boats, thanks to Microsoft’s investment in OpenAI ($10 billion) and […]

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Capital is still flowing to the earliest startups (Carta)

Capital is still flowing to the earliest startups (Carta)

Carta has published another interesting report on the distribution of investor interest depending on the stage of startup financing. The starting point was 2021, after which the increase or decrease in investor interest was analyzed. The graph clearly shows two trends. SAFE and Convertible note are becoming an attractive form of investment, particularly for new investors. It is fast and cheap – low entry barrier.

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Results of 2023: 95 new unicorns

Results of 2023: 95 new unicorns

Last year, 95 startups from around the world received a valuation of more than $1 billion. This is the lowest number since 2016. Most of the new unicorns – 20 of them – specialize in artificial intelligence. Fintech, cleantech, and energy accounted for 14, 12, and 9 startups respectively. Geographically, there is a significant advantage of American companies – 41 of the new unicorns were from there. 24 companies are from China, and three each are from India and the UK. Today, there are more than 1,500 unicorn startups in the world with a collective valuation of more than $5 trillion. In total, they have already raised more than $900 billion from investors.

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LP income from venture capital is falling

LP income from venture capital is falling

In Q4 2023, the income distributed by US venture capital funds to LPs fell to its lowest level in 14 years. The peak value was 32% in Q2 2022. Since then, the average distribution of US venture capital funds has been declining every quarter. The exception was a slight increase in Q1 2023. The main reason for the drop in yields is the lack of exit options. This directly affects the balance of funds that can be reinvested in other venture funds. With such results, LPs are less inclined to invest in new structures and venture capital companies with a poor history of profitability. Preference is given to funds with high DPI and a long history. The increase in the number of IPOs projected for 2024 should help improve the situation.

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American VCs are in no hurry to spend money

American VCs are in no hurry to spend money

According to Pitchbook, at the end of 2023, American venture capital companies had $311 billion in dry powder. The capital of the so-called “dry powder” reached a record level. American venture capital firms were able to spend only half of the $435 billion raised from investors between 2020 and 2022. Investors are in no hurry to spend money given the current economic climate. The main reason is that you shouldn’t invest if you can’t make money on it. Last year, investors were able to distribute only $21 billion to LPs. As a result, there is growing pressure from investors to either waive management fees or return some of their capital. Sequoia Capital has already begun to waive fees for unused capital. Some investors, including Lightspeed, are transferring portions of their portfolios to a new continuation fund, from which LPs can withdraw at any time.

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US investors reduce their focus on Europe

US investors reduce their focus on Europe

According to Pitchbook, US investors participated in 1,863 European deals in 2023. The activity decreased by 40% over the year. In 2022, U.S. VCs financed 23% of the total number of deals in the region. At the same time, despite the decline, the level of participation remained the third highest in the last decade. US investors are increasing their participation significantly each year, up from 11% in 2013. The main reason is the overall growth of the European startup market. American investors are likely to focus on their core domestic markets. But there are those who are increasing their presence. IVP and Andreessen Horowitz are opening offices in Europe. In addition, last October, General Catalyst acquired La Famiglia, a German early-stage venture capital firm.

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Investors focused on financial efficiency

Investors focused on financial efficiency

Kruze Consulting has found through a survey that investors have begun to pay more attention to revenue performance. Startups that received Series A funding in 2023 showed four times more revenue growth than those that failed. Investors want to see Series A startups that are not only growing rapidly, but are also efficient in terms of capital utilization. While revenue growth is important, investors believe that gross profit margin is much more important, as several seed startups with impressive revenues have failed to raise funding in Series A rounds. Around 90% of seed-stage startups that raised subsequent Series A rounds had gross margins of more than 50%. On average, the most successful companies that passed Series A had gross margins of 80%. Startups that successfully raised Series A rounds had an average loss ratio of 3 times. Startups that failed had a 10x multiple.

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Tough year for M&A: 31% drop in venture-backed startups in 2023

Tough year for M&A: 31% drop in venture-backed startups in 2023

Acquisitions of venture capital-funded startups hit an eight-year low in 2023 as strategic buyers and private equity firms decided to hold off on spending, expecting startup valuations to decline further. Only 1,738 venture-backed startups were acquired globally in 2023, the lowest number since 2015 and a 31% decline from 2022. In the U.S., the number of deals also fell to a ten-year low, with 824 deals in 2023, down 30% from the previous year. Large deals were rare, but some significant deals still took place, including the $4.9 billion acquisition of Scopely by Savvy Games Group. Expectations for 2024 vary, but many are hoping for a revival in deal activity, especially in the cybersecurity, cryptocurrency, semiconductor, and artificial intelligence sectors.

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Carta: Every fifth investment round in 2023 is a Down Round!

Carta: Every fifth investment round in 2023 is a Down Round!

Another report reveals the difficulties startups faced in attracting investment in 2023. This time, the Carta service has revealed the down-rounds figures. A down round is an investment round in which the company’s valuation decreases compared to the previous one. That is, companies are forced to raise funds on deteriorated terms, but these are the realities of the market: take the money or die. The chart shows that companies at later stages of development have been disproportionately affected by this trend. As a rule, their valuation has fallen by a larger percentage. Experts disagree on how to interpret the drop in company valuations. Some see it as a market problem, while others see it as a path to recovery. Carta is inclined to the second opinion.

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Reality Check: European Tech Funding Drops by 42% in 2023

Reality Check: European Tech Funding Drops by 42% in 2023

In 2023, the European technology landscape faced a significant reality check, as evidenced by data published by Sifted. Funding for European startups throughout 2023, up to December 5, experienced a notable 42% decline when compared to the previous year, 2022. The most substantial decline was observed in Series C and beyond funding rounds, where the total funds raised were reduced by half, marking a decrease from $61.4 billion in 2022 to $30 billion in 2023. Across all European countries monitored by Sifted, there was a consistent decrease in the total funding amount when compared to the previous year, with the exception of Denmark, which managed to match the €1.4 billion it raised in the preceding year.

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2024 Seed Round Environment: A Challenging Terrain for Startups

2024 Seed Round Environment: A Challenging Terrain for Startups

The Crunchbase article, “Lower Valuations, Higher Bar: What It’s Like To Raise A Seed Round In 2024,” discusses the current state of seed-stage startup investing. Main ideas:Aftereffects of 2021’s Boom: In 2021, startups raising seed funding faced a more forgiving environment with higher valuations. However, the scenario has since shifted, leading to lower valuations and stricter criteria for funding. This change was influenced by the previous year’s overvaluation and the need for startups to prove their worth more convincingly to attract investors. Changing Dynamics in Seed Funding: Despite the lower valuations, seed funding hasn’t seen a significant drop from its peak. The bar for securing seed funding has risen, especially for first-time founders, who now need substantial traction to raise funds. The trend shows a shift towards larger seed rounds, with fewer but more sizeable deals being the norm. Implications for Future Funding: The seed stage has become a more […]

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US Seed Investment: Resilient in Downturn, Bright Prospects for 2024

US Seed Investment: Resilient in Downturn, Bright Prospects for 2024

US seed funding has remained strong despite a decline in startup investments worldwide. This is promising for the future in 2024. US seed funding increased by almost 10% in 2022, but then dropped by 31% in 2023. However, it still remained more stable than funding at other stages. This downturn, while significant, was less severe compared to the broader investment landscape, with seed funding still above pre-pandemic levels. Investors are positive about the growing startup environment, with lower company values and more skilled workers, which could benefit early-stage companies in the future. In the last ten years, seed funding in the US has increased significantly, reaching a peak of over $16 billion in 2022 before dropping to $11.5 billion in 2023, which is still higher than the investment levels of 2019 and 2020. The current market dynamics have led to more selective investment practices at the seed stage, with a […]

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Funding for Web3 in 2023 fell sharply

Funding for Web3 in 2023 fell sharply

Web3 startup investments dropped by 74% in 2023, totaling less than $7 billion from 1,564 deals (Crunchbase). This is a significant decrease compared to the previous year, which saw $26.6 billion invested across 2,891 deals. This is the lowest level of investment since 2020, marking a sharp decline in investor interest in the sector. In the fourth quarter of 2023, only $1.1 billion was raised in 221 deals, down 21% from the third quarter and 65% from the same period in 2022. During the year, only eight Web3 startups were able to raise $100 million or more in funding, a significant drop from 118 such rounds in 2022. Bitcoin has recovered significantly and regulatory developments, like the SEC’s approval of spot bitcoin ETFs from 11 companies, suggest a potential return of interest in the sector, despite the overall downturn. However, investor interest is shifting to AI, leaving Web3 facing the […]

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Warm Latin America also has a cold venture capital winter

Warm Latin America also has a cold venture capital winter

In 2023, VCs invested $2.9 billion in Latin American startups. Crunchbase calculated the funds and tried to determine the reasons for the negative trend. The above amount means that venture capital funding in the region has fallen by 63% compared to 2022. The drop of 84% compared to the record-breaking figures of 2021 is even more impressive. Latin America has been experiencing the fastest decline in venture capital funding for two years in a row. Crunchbase’s experts think that the negative trend is not only due to regional specifics and political conditions. There are multiple reasons for it. The problems are primarily economic. This is a multiplier for the global decline in venture capital funding. Brazilian startups are doing better than others in the region. Lending provider QI Tech raised $200 million in Series B, and online real estate platform Loft received $100 million in new funding. Despite the overall […]

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How much does a startup cost? Data from Carta

How much does a startup cost? Data from Carta

One of the signs of the next “venture winter” is a drop in valuations of companies that are attracting investment. Carta has analyzed the clients of its service over the past three years. In 2021, a study revealed that the median valuation of a new Series D company was over $800 million, making it very close to achieving unicorn status. In 2023, the average company at the same stage was valued at $222 million. The decline is also visible at other stages, but the percentage difference is very different. Compared to 2021, Series A valuations are down 8%. Series D valuations are down 73%. Carta experts believe that in 2024, we should not expect a rapid return of valuations. Interestingly, they call it a return to “full health”. Or maybe it’s the current valuations that are healthy?

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Prolonged Fundraising Periods Challenge Venture Firms in 2023

Prolonged Fundraising Periods Challenge Venture Firms in 2023

In a significant shift within the venture capital landscape, 2023 has marked the longest fundraising period for venture firms in over a decade. According to recent data from Pitchbook, the median time required to close funds has expanded to 15 months, a stark contrast to the previous year’s decade-low average of 9.3 months. This notable increase, representing a 46% surge from 2022, signals a shift in the investment climate. The change is primarily attributed to a more cautious approach from limited partners (LPs), who have pulled back their investments in response to multiple economic stressors. Key factors include a decline in technology stock prices, rising interest rates, and a noticeable reduction in initial public offerings (IPOs). The current economic environment has prompted fund managers to adopt new strategies to attract LPs. These strategies include offering more favorable terms, such as side letters and co-investing rights. However, the fundraising landscape is […]

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A16z is the most active investor in 2023

A16z is the most active investor in 2023

Crunchbase continues to summarize the results of the past venture capital year. it’s time to identify the most active investors. Andreessen Horowitz took part in 79 venture capital deals and became the first. Lightspeed Venture Partners and Bpifrance took second and third place in the list with 57 and 55 deals respectively. A16z also ranked second in the ranking of the most active investors leading or co-leading deals. Microsoft became the leader thanks to its $10 billion investment in OpenAI and $1.3 billion in chatbot startup Inflection AI. Interestingly, A16z’s leadership came despite the fact that they closed 43% fewer deals compared to 2022. This trend is even more pronounced given the fact that last year’s leaders – Tiger Global Management, SoftBank Vision Fund, and Sequoia Capital – are not on the 2023 list. Among Seed stage investors, the leaders have not changed: Techstars, Y Combinator, and Antler. Source: https://news.crunchbase.com/venture/active-investor-ranks-a16z-lightspeed-eoy-2023/

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DocSend Report: Investors have less and less time, but that doesn’t stop founders

DocSend Report: Investors have less and less time, but that doesn’t stop founders

In recent years, DocSend has become one of the recognized standards in communication between startups and investors. Entrepreneurs use it to share presentations of their companies, tracking interest statistics. DocSend regularly releases reports that use general data without disclosing company names. This allows you to see trends that characterize communication between the parties. The company has just released another report describing the state of affairs in 2023. The 26-slide presentation with the report can be found here: DocSend report. We will share a few interesting slides from it. Less engagement vs. More pitch decks?! Team + Problem + Market size Show me your money! More contacts. Less meetings. Is winter coming?

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U.S. App Startups See Decline in Funding as Investors Shift Focus to AI

In a notable shift within the U.S. venture capital landscape, the once-dominant app startups are now seeing a marked decline in funding. This year, venture capitalists have poured approximately $3 billion into app startups, a significant decrease compared to previous years, according to data from Crunchbase. This change is particularly striking given that in 2016, app startups accounted for 14% of all U.S. funding. However, fast forward to 2023, and their share of the capital pie has dwindled to a mere 2.5%, despite the ever-growing popularity of applications. The investment trend for U.S.-based app startups reached its zenith in 2021 with a massive $19 billion inflow. Yet, this momentum was short-lived as the sector experienced a steep 64% plunge in funding the following year, closing at just $6.7 billion. This downturn isn’t just a one-off event; the trend of declining investments continues, with many investors now turning their attention and […]

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AI Startups in Europe: A Surge in Funding with Mistral AI Leading the Charge

AI Startups in Europe: A Surge in Funding with Mistral AI Leading the Charge

In an unexpected twist in the tech world, funding for AI startups is skyrocketing across Europe, a region traditionally not known as a hotbed for AI innovation. This surge is headlined by the French generative AI startup, Mistral AI, which recently secured a staggering $487 million in funding. This investment round, spearheaded by the renowned Andreessen Horowitz, catapulted Mistral AI’s valuation to an impressive $2 billion, placing it firmly at the top of Europe’s AI startup scene. This funding frenzy isn’t isolated to Mistral AI. To date, 16 other European AI companies have collectively hauled in over $1 billion, signaling a robust interest in AI technologies across the continent. Notably, Synthesia, another major player in this burgeoning field, has clinched the second spot on Crunchbase’s list of most-funded European AI startups. Following a $90 million Series C funding round led by Accel, Synthesia achieved unicorn status in June, further emphasizing […]

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3,200 startups failed this year

3,200 startups failed this year

Pitchbook data was analyzed by The New York Times and Entrepreneur. They found that the startups that failed raised a total of more than $27 billion in venture capital funding. This is almost the same as the $29.8 billion total investment in startups in the third quarter of 2023. One of the main reasons is that it is increasingly difficult for companies to attract investment. Venture capital funding for startups decreased from $183.9 billion to $104.5 billion between the first nine months of 2022 and the same period this year. Tom Loverro, general partner of IVP, eloquently described this period as a “mass extinction” of startups.

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Warm and cold introductions: how it works

Warm and cold introductions: how it works

If you ever wanted to find funding or maybe a company to invest in, you definitely thought about introduction and communication. Unicorn Nest analytics did a massive survey to understand introduction principles and ready to share them.  A startup needs to know that there is no one most efficient way: all funds have different ways of getting an introduction for a startup. For instance, 22% of responding funds get the most introductions through colleagues from the other funds; close acquaintances and portfolio startups are also popular options picked by 18% of the respondents. But what about other sources? Workplace, schools, cold emails? Well, a small teaser is “it all works”.  But let’s check how. Fraternities and sororities  There is a pretty popular opinion that sharing the same college or school can seriously influence your future because of networking and close relationships while being young. According to the provided survey, sharing […]

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VC co-investment syndication: how to use and understand

VC co-investment syndication: how to use and understand

research about venture capital (“VC”) syndication, so it is time to go deeper and understand key features in syndicated co-investment. This type of investment is a quite common process for VC deals; however, their structure is quite diverse: it depends on investor type, startup specialization, geography, stage of development, and many other factors. To make a deal, both the startup and the fund must understand what side encouraged joining the syndicate, what part will be covered by the lead investor, and the reasons forcing the funds to join the syndicate. The UN research team asked those questions to 210 foundations worldwide and found a lot of outstanding insights that describe in depth the behavior of investors in the syndicate, its context of geography, industries and investment stages. Would you like to know more? A closer look at respondents  Among the 210 funds the Unicorn Nest decided to ask, 56% comes […]

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VC syndicates: data analysis behind the myth

VC syndicates: data analysis behind the myth

What do company owners think about syndication in venture? This phenomenon looks complicated, but financial scientists started to research it a long time ago. In their attempts provided all over European and American universities, specialists try to discover and test hypotheses about the underlying reasons for the fund’s cooperation into syndicates. These attempts were successful, as they managed to identify top-3 reasons for syndicate forming: risk sharing, portfolio diversification, and the option to access larger deals. But there are still a lot of in-depth insights. For example, researchers got evidence that a lower level of experience and expertise fosters the need to syndicate an investment, so the VC-funds join syndicates for the syndicate partners’ selection and value-adding skills. Thus, Unicorn Nest decided to get more data by starting to analyze syndicates. This research aimed to increase understanding of the venture capital market based on a comprehensive and verified dataset of […]

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Measuring VC success: Success/Strategy Similarity Index

Measuring VC success: Success/Strategy Similarity Index

The number of exits of portfolio startups is one of the core metrics of a venture fund. To generate revenue for their LPs and attract investors in the future, VCs try to come up with smart and viable investment strategies. It requires finding a balance between portfolio diversification and limited expertise of funds’ partners.

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Cross-border investments: to do or not to do

Cross-border investments: to do or not to do

Startups often underestimate their chances to find cross-border investments and receive funding for the required purposes. UN decided to learn more about the reasons and consequences of such decisions and interviewed 230 funds around the globe to find out how cross-border deals work for them, what spheres of interest attract VC-funds, where they prefer to invest, on what stages, and much more information. This research aimed to be useful both for startups and for investors to see key directions for cross-border deals and might help to review the investment strategy. Cross-border is a new black  According to the research, only 6% of funds are going to reduce the number of cross-border transactions, while 36% are going to increase it. This means COVID-19 crisis might have a short-term impact on investment plans now, but ⅓ of funds will increase their investments in the nearest future.  Funds from Latin America, Western Europe […]

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Tweet me tender: how investors emotional posts influences VC

Tweet me tender: how investors emotional posts influences VC

Venture industry itself is risky, full of surprises and requires attention. Information is a new air, but it can be used in different ways, and sometimes might be harmful for the market. COVID-19 is a perfect example that happened only half a year ago: internet and media were overdosed with materials predicting the future of all VC industry and startups market. Eventually, all this data could influence a company with premature decisions and intensify the crisis.   That’s why it is crucially important to define and understand the media landscape. For this purpose, one of the methods of automatized linguistics is being used. It is called sentiment-analysis and together with the UN we will discover how big is its power.  Meet the basis Sentiment-analysis already entered your life, starting from Barack Obama election campaign back in 2008. There are definitely a lot of examples even before, but Obama’s social media campaign […]

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Cross-Border investment: Unicorn Nest research 2020

Cross-Border investment: Unicorn Nest research 2020

The number of cross-border venture capital investments has increased by 5 times since 2000, and it continues to grow. At Unicorn Nest, we decided to examine the trends in cross-border investments in the latest period, since 2014, and here are some of the key takeaways. But firstly, let’s clarify what we are writing about. Cross-border investing refers to a financing arrangement that occurs outside a country’s borders and could help to find resources beyond domestic borders. Cross-border venture capital investments play an important role in scaling up high-growth companies. Policymakers express concerns that foreign VC investments transfer the majority of economic activity to the investor country. The startups however welcome foreign capital, expertise, and networks that usually go along with cross-border investments. Startups are often wary of international investments, especially from VC-funds located far from a startup’s incorporation country. This article also explains geographical connections between VC funds origins and […]

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VC vs COVID-19: how investors react to ongoing financial crisis

VC vs COVID-19: how investors react to ongoing financial crisis

Great lockdown recession is often compared with 2009 crisis and predicted to be the worst economic downturn since The Great Depression. According to IMF report in June, global growth will fall by 4,9 percent; global economic recovery is expected to be 5,4 percent in 2021, but this forecast might work only if pandemic fades in the second half of 2020. All three IMF scenarios infer negative dynamics for 2020 and uncertain growth in 2021, depending on COVID-19 possible outbreaks.   Venture capital investments is being on a list of sensitive spheres instantly responding on every economic turmoil. However, the research, provided by EXPERTORAMA in partnership with Unicorn Nest, displays that investment funds are more optimistic about the end of crisis, comparing to IMF data. Losses and reduction Based on research provided with surveying 250 funds mostly in North America, Europe and Asia, almost 19% of representatives decreased number of deals. […]

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Survival strategies for startups during the crisis

Survival strategies for startups during the crisis

In light of recent events, many startup owners are thinking about how to survive in times of crisis and how to raise money. We recommend listening to Denis Dovgopoliy, who during his career managed to be both on the side of startups and the side of investors. Also, he witnessed the global financial crisis of 2008-09 in Silicon Valley How it was in previous crises Of course, the current crisis is very different from the global financial crisis of 2008–2009, and from the Great Recession of 1999–2000, but it is worth paying attention to many significant trends. In particular, the fact that those investors and entrepreneurs who successfully survived the 1999–2000 recession, when the entire industry collapsed, worked much more efficiently. As soon as the crisis came in 2008, the sub-primes collapsed and the market experienced a shock, startups who raised money shortly before the crisis were in absolute gain. […]

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What we tweet vs what we invest

What we tweet vs what we invest

Nowadays there is almost no startup left that would work in one narrow field. All the successful cases appear at the intersection of different industries. Therefore, the task of each fund is to determine in its strategic direction the set of industries that will not only be required separately in the future, but also within the interaction between its elements that will cause a synergistic effect for the entire portfolio. At the same time, the apparatus for making key decisions of the fund consists of employees (partners), each of whom has a unique set of skills and past experience that gives this employee expertise in a particular area. In this article, we analyzed how widespread are the differences between the fund’s strategy for selecting industries for its portfolio compared with the industries that its key employees are interested in. To accomplish this task we compared the top 10 most popular […]

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