Want to filter through private equity and venture capital news? Here are the top five takeaways through Oct. 4:
Twitter (because I can’t avoid it)
TWTR claims to be the anti-Facebook and has yet to name their stock exchange, but if you would actually like to go beyond mainstream media and invest smarter (because isn’t that why we all care?) make sure to study up on Twitter’sfinancial metrics and valuation history.
You know a VC topic is truly a big deal when your Twitter feed gets flooded with tech journalists constantly chirping. This happened twice this week: Twitter’s IPO announcement and AngelList’s Syndicate offering. PandoDaily has a concise post summing up the Syndicate chatter, but what really matters goes beyond the initial reactions: how will this change VC investing in the long term? Some believe that Syndicates will minimize the non-monetary value of an investor’s commitment (time commitment, support) while others believe it’s bringing greater transparency to venture capital. Personally, I’m interested to see if this is a fad or becomes a serious investment strategy. What’s for sure is that if you are an accredited investor you can now pool with some of the best in the VC industry at the drop of a hat – or a tweet from Brad Feld.
interested in being part of our AngelList Syndicate? Take a look - http://t.co/ma38xbAHdr— Brad Feld (@bfeld) October 2, 2013
“Software is eating the world”
This famous quote by Marc Andreessen (who was also quoted last night) was re-spun this week by Mahendra Ramsinghani, who believes that software is eating venture capital. He could be on to something: though the number of VC funds raised has remained relatively consistent over the last year (36 in 3Q 2012 to 34 in 3Q 2013), total capital raised dropped by almost 50%, according to venture capital data released yesterday from PitchBook. I wouldn’t say that venture capital as an industry is going away anytime soon, but funds are definitely getting smaller and it is taking smart investments to have significant returns. The chatter among VCs is that it takes less money to start a company and this should be having an impact on the fund side, as well.
There are a multitude of reasons why people should be dwelling on the U.S. government shutdown, and the most relevant for readers of this blog is that economic disaster isn’t good for private equity. The central fear is the potential for negative impacts on exit strategy, particularly for those with government business in their portfolios.
3Q 2013 Data
Last week, PitchBook’s media team was busy compiling end of quarter private equity and venture capital data. My favorite snapshots were the regional venture capital data sets, such as the Los Angeles and New York snapshots below.