Joshua Mayers May 04, 2016
In case you missed any of our featured content over the past month or so, we crafted this tidy summary of our most popular posts from April.
Founders vs. CEOs. Paper gains. Mega-funds. Marijuana. Fintech. Drones. We covered it all—and much more.
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The skills needed to build a company are vastly different from those needed to run a business. And with private companies remaining private longer, investors may find themselves battling with whether to keep their founders in power and help them develop into a CEO, or instead bring in a professional CEO to lead the company to exit. To bring some data to the discussion, we analyzed exits metrics for companies led by founders against those led by professional CEOs. Our own founder and CEO, John Gabbert, followed up on this topic with a first-person perspective on how the role of the founder is evolving.
As more and more U.S. states have enacted legislation to legalize recreational marijuana, the cannabis industry has begun to see massive growth, investment and innovation that other budding industries are accustomed to. We’ve featured a few of the companies and investors that are working to stake their claim within the marijuana industry.
You’ve probably heard a lot about big-ticket takeover proposals (successful or otherwise) from Chinese buyers vying for companies in the U.S. and Europe. But outside of these highly publicized transactions, is Chinese M&A activity in the U.S. and Europe really heating up? Check out our datagraphic to find out, featuring a timeline of notable deals, top investors/buyers and more.
The venture-funding arms race over the past few years has drawn companies to raise larger and larger rounds, even when they haven't necessarily needed the money. When asked about the company's valuation after its first unicorn round, Slack CEO Stewart Butterfield stated, "One billion is better than $800 million because it's the psychological threshold for potential customers, employees and the press."
This pursuit of unicorn status has created a hold behind the $1 billion+ valuation bucket, where one would normally expect many more companies valued between $500 million and $999 million. Take a look for yourself.
It's no secret private equity investment is down, but to take a wider look at activity, we've featured nine of the top charts from our 1Q U.S. PE Breakdown to get a preliminary sense of how overall strategies are evolving. The numbers for a few of these datasets are likely to shift over time, so remember that these are just early indicators.
When the CEO of a top bank warns its shareholders that “Silicon Valley is coming,” as J.P. Morgan’s did last year, it’s a good bet that there may be major disruption on its way to the finance industry. While fintech startups have been catching investors' eyes for some time now, the pace of activity has definitely quickened over the past few years. We spotlighted the industry and highlighted the most active VCs in the space.
More than $550 million of VC was invested in drones and unmanned aerial vehicles in 2015, nearly 8x the total invested in the space just two years earlier. The increase is not surprising, as drones have become very popular among consumers. Along with the increase in drone usage, however, has come an increase in reported incidents involving drones and illegal activity, and it was only a matter of time before a tech company addressed the safety concerns of consumer-operated drones. Read more about that company here.
In certain circles, 2008 will always be remembered as the year the worldwide economy went through its greatest crisis in nearly eight decades, when global markets tanked and investment activity evaporated. That same year, four blue-chip private equity firms closed mega-funds of $10 billion or more. Eight years down the line, have those funds born in the most hostile of conditions flourished or wilted? Find out here.
"It's not money until you can buy beer with it," Brad Feld recently warned.
With that in mind, we took a quick look at the venture funds currently sitting on the largest paper gains using our fund returns data. The current amount of capital that is mentally "booked" but not actually deposited is significant. There are several funds here that have very impressive returns but are sitting completely on paper gains. Attention, LPs, GPs and founders: you should be aware and likely talking a lot more about realized rather than unrealized gains.
How have U.S. venture valuations shifted in response to the recent downturn in activity? Knowing not everyone has the time to read through our entire data-rich VC Valuations & Trends Report (is it a whopping 20 pages, after all), we pulled 10 of the top charts featured in the report for a visual summary, covering pre-money valuations by stage and sector along with other metrics such as average company age, deal terms and up/down/flat rounds.
ABRY Partners has come a long way since 1989, when the firm closed its first private equity fund on $35 million. Today, ABRY is in the midst of investing its eighth flagship fund—a $1.9 billion vehicle— and so far in 2016, the firm has been putting all that capital to very active use. In the inaugural edition of our Investor Spotlight, we break down ABRY Partners’ investment strategy, recent deals, key decision makers, fund performance and more.