venture capital

Venture capital on pace to break all kinds of records in 2021

The PitchBook-NVCA Venture Monitor Q3 2021 reports eye-popping investment activity through the first three quarters of the year. So far this year, the total venture capital market has invested more than $238 billion across an estimated 12,000+ deals, more than 1,300 exits have yielded more than $580 billion in value for investors, and 526 funds have raised more than $96 billion.

Feeding opportunity

The emerging innovation-intensive sector of urban farming is seeing heightened interest by venture capitalists, investments are growing faster than the crops: $2.4 billion so far this year at last count by PitchBook. That reflects a year over year (YoY) investment growth rate of 214 percent.  The number of individual deals also is rising 14 percent YoY. The sector is expected by many market analysts to capture an increasing share of the nation’s food supply for a number of reasons.

Venture capital increasing adoption of environmental, social, & governance (ESG) principles

Increased adoption of environmental, social, and governance (ESG) principles has been empirically linked to improved financial performance, but venture capital (VC) has fallen behind other sectors in embracing such measures. With more than $100 trillion in assets under management (AUM) already being managed according to the ESG framework globally, a recent article by Johannes Lenhard and Susan Winterberg provides some guidance on how VC can improve in adopting ESG principles, while also giving some pointers to limited partners (LPs) in VC funds, regulators, and company founders — the groups that have been the drivers of what little ESG adoption VC has experienced.

VCs invest at historic levels, but deal funnel shifting

The PitchBook-NVCA Venture Capital Monitor for the first half of 2021 reveals that the market is set to break a number of investing records, but strikingly, the record levels of investment activity are all being set by the later stages of investment. At the other end of the funnel, activity is increasing, but not at the same pace as the overall market.

Need for smart, public, earliest stage money never greater, latest VC data indicates

If venture capital was water, then sea levels continue to rise.  Yet more and more innovation-based startups across the country seemingly are being left high and dry as private venture capitalists continue to push their money into bigger, later stage deals. Investors seem increasingly set to cruise toward cashing in on the currently hot exit path of public listings.

Venture-backed exit in Appalachian Ohio shows strength of higher ed, state-backed economic development for rural areas

For those looking for examples of the impact state investment, university involvement and tech-based economic development can have in rural parts of the country, one can examine news from Appalachian Ohio that Stirling Ultracold reached a definitive merger agreement on March 22 to be acquired for a reported $258 million by publicly-traded BioLife Solutions. The original lead investor in Stirling Ultracold is TechGROWTH Ohio, one of Ohio Third Frontier’s regional entrepreneurial service providers.

Congress reveals COVID bill with $10 billion SSBCI

The U.S. House of Representatives is working through the coronavirus relief package in committee markups this week, and there are several provisions that could have a significant impact for regional innovation economies. The highest-profile of these is $10 billion for a new State Small Business Credit Initiative (SSBCI) program. Reauthorizing this program has been a top priority for SSTI's Innovation Advocacy Council, as SSBCI was one of the federal government’s only sources of funding for equity investments in the past two decades.

Women and VC: Despite some progress, women-founded and -led companies hit harder by 2020 pandemic

While venture capital (VC) deal activity by women-(co)founded and women-led companies has increased over the last 15 years by some metrics, a new report indicates that the 2020 pandemic and global recession impacted these companies more than companies founded and led by men. In the second edition of its annual All In Report, PitchBook expands on its efforts to shed light on the dynamics of women’s participation in the VC market. While participation in the VC market was impacted for companies founded and led by men and women in 2020, the report highlights the impact on women-founded and -led companies by showing recent declines in nearly every measure used in the report compared to nearly constant pre-pandemic trends in increased deal count, deal value, company valuation, and exit rates by women-founded and -led companies.

Useful stats: Later-stage VC has a banner year, uncertainty about early stages

Deals raising at least $50 million grew by nearly one-quarter in 2020, driving an additional $18 billion in deal value to a new record of $156 billion invested. This data, from the PitchBook-NVCA Venture Monitor, suggests that the total venture capital market will see a slight decline in investment deals overall from 2020.[1] This slip in deal activity is driven by what is currently an 11 percent decline in seed or angel deals and a 20 percent decline in early venture capital deals.

Recent Research: Social connections more important than geography in accessing investment capital

The strength of personal relationships and social connections are the most important factors for accessing capital markets according to a recent working paper from the National Bureau of Economic Research (NBER). Theresa Kuchler, Yan Li, Lin Peng, Johannes Stroebel, and Dexin Zhou — using a novel modeling system and index of “social connectedness” — conclude that physical, geographical proximity has long served as the primary proxy for measuring how the social connections among firms and investors across geographies affect access to capital markets and investment decisions. These findings may have far reaching impacts for businesses from any region—not just those closer to investment hubs—as well as for entrepreneurial support organizations and other stakeholders seeking to strengthen their local innovation communities.

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