Kaya Yurieff’s Post

Earlier-stage startups are seeing stronger valuations and smaller declines in total capital availability. However, late-stage investment has been in retreat. But don't mistake a dramatic late-stage recession with general startup malaise. #startups https://lnkd.in/dXUR3fWz

🌐 The global startup funding landscape is shifting, and staying informed is vital to understanding the opportunities and challenges ahead. According to a recent Crunchbase article, global venture funding has slowed significantly this year. Yet, amidst this downturn, there are glimmers of hope - late-stage funding is up YoY, suggesting that investors are still willing to back mature startups with proven business models. 📈 Two unicorn companies are leading the charge - grocery delivery platform Instacart and targeted marketing platform Klaviyo- and have filed plans to go public next month. Their successes could reinvigorate the funding landscape, providing fresh optimism for startups globally. 🦄 But let's not sugarcoat it - it's still a tough funding environment. Now more than ever, startups need experienced venture capitalists to guide them through these challenging times. At Hone Ventures, we're committed to supporting innovative entrepreneurs, offering funding, mentorship, strategic advice, and a network of industry connections. 💼 We'd love to hear from you if you're an entrepreneur seeking support in this evolving landscape. Together, we can turn today's challenges into tomorrow's opportunities. 💡 #HoneVentures #StartupFunding #VentureCapital #Entrepreneurship Global Startup Funding Remains Subdued But IPO Market Sparks Hope Of Rebound http://dlvr.it/SvzslP

A few weeks ago, Ben Lerer, managing parter of Lerer Hippeau, a New York-based early-stage venture firm, set his sights on leading a young enterprise software startup's seed round. Given it has been a struggle for non-AI startups to raise capital in 2023, he did not expect much competition with other investors. "I thought everyone's been slow to deploy and we're in this time where there's not a bunch of capital availability," said Lerer, who was not ready to share the startup's name. But Lerer was surprised to see the startup land seven term sheets, something he and other VCs Business Insider spoke with say is emblematic of the unique venture market that was 2023 and will likely continue next year: An extreme divide between have's and have not's, with very small differences in the companies that captivate the interest of investors. "When deals get hot, there is extreme interest," Lerer said. "But if you are on the wrong side of it, there's not a cent." https://lnkd.in/gpUNbxJG

In 2024, startups can anticipate an uptick in public offerings and fresh interest from large corporations in startup investments. However, a decline in the number of 'unicorns', startups valued over a billion dollars, is also forecasted. This paints an intriguing picture of the future startup landscape, potentially driven by market shifts, competition, and investor trends. #Startups2024 #InvestmentTrends

The Secret Sauce Behind Those Billion-Dollar Unicorn Valuations A new study on Journal of Business Venturing reveals the key ingredients that enable startups to gallop towards billion-dollar “unicorn” valuations before going public. Researchers find that a startup’s inherent scalability and access to ample venture capital are the magical elixirs for inflating valuations. Scalability - the ability to exponentially scale a business with minimal incremental costs - increases a startup's growth potential and market value. But the governance pressures of public markets constrain aggressive scaling strategies. This pushes highly scalable startups to stay private longer to maximize value. That's where bountiful venture capital comes in. With more VC money available, scalable startups can keep scaling privately while delaying the public scrutiny. This potent combination allows startups to double-down on explosive growth with VC money before facing public market discipline. The result? Higher valuations down the road. So next time you wonder how a young startup gallops to a $10 billion value before its IPO, remember its secret sauce: - Scalability to pursue exponential growth  - Venture funding to keep scaling under the radar Stir in some FOMO among private investors, and you’ve got a recipe for massive pre-IPO unicorn valuations. The research reveals why we're seeing more of these mythical creatures than ever before. Scalability and venture capital are breeding unicorns like never before!

AngelList with it's Q2 venture report. What makes this report somewhat unique is that they've teamed with Brex to provide data on startup spending. ➡ Here's their summary: "Given the slowdown in fundraising activity and overall economic uncertainty, it’s no surprise Brex’s data found that startups continued to be increasingly disciplined about spending in 2Q23, a trend evident since the start of 2022. This slowdown in spending was particularly pronounced for seed-stage startups, which cut back on average spend by 16% compared to the same time last year. Early-stage startups pulled back on average YoY spending by almost 10%, while later-stage startups only reduced spend by 3.8% YoY. ➡ My Take: ⏹ These numbers are averages, so maybe spending increases at the top end are skewing the numbers. If not, then there is a lot of cutting still to come. ⏹Let's say you raised at the start of 2022 for an 18 month runway. If you decreased spending by 15%, you bought yourself about 3 months of runway. So instead of cash-out at the end of June, its now the end of September. Cost cuts of this magnitude are not likely to make a difference for most ventures. ⏹The relatively modest spending cuts become even more surprising since in Q2 2022 most ventures were still executing against inflated '21-era business plans and their hyper-growth spending plans. #venturecapital

Dealmaking involving venture-backed startups hit an eight-year low last year, as strategic and private equity buyers decided to keep their cash, likely waiting to see how far startup valuations would drop. It is not shocking that dealmaking hit a low ebb last year, but the dearth of VC-backed startups sold last year may offer a surprise. In 2023, only 1,738 venture-backed startups were acquired globally — the lowest amount since 2015, when 1,687 startups were bought — per Crunchbase data. The number is a 31% decline from the 2,507 deals in 2022 and a 21% drop from 2021. The figures did not get better as last year wore on either. In fact, they declined quarter by quarter, with just 340 deals consummated in the fourth quarter. #vcfunding #capitalmarkets #fundraising #startupfunding #venturecapital

The most valuable startups are nearing profitability, but at what cost? This trend reflects improvements in the startup ecosystem, but also raises questions about sustainability. How can startups maintain growth while balancing profitability? #Startups #Venture #StartupTrends

Q2 2023 was the worst quarter for startup dealmaking ever observed in our dataset: - Investment activity hits record low (for the second consecutive quarter) 🤝 - Second-lowest positive activity rate ever ❌ - Median valuations fall to pre-pandemic levels 📉 - Startups practicing financial discipline to extend runway 💵 Our 2Q23 State of U.S. Early-Stage Venture & Startups report explores if we've found the “bottom” of the market. This quarter’s report was produced in collaboration with Brex. Taken together, our datasets paint a detailed picture of how capital flowed into and out of startups in 2Q23, including data on popular investment and spend sectors, funding to female founders, popular locales for new startups, and much more. Find a link to the full report on our blog: https://lnkd.in/dJWRUeAM

Yes VC Partner Caterina Fake is a SuperForecaster, one of the 30 most successful early-stage startup investors in the world according to TRAC. What do these SuperForecasters have in common? Most are in their mid-40s; it takes up to 10 years of active investing in startups before an investor will qualify as a SuperForecaster. They probably didn't go to business school and were likely math, computer science or engineering majors. (Caterina, as listeners of Tim Ferriss know, majored in Renaissance literature!) Almost two-thirds have started one tech company and almost half have started two startups. (Caterina co-founded Flickr and Hunch) They rarely make follow-on investments. The SuperForecaster follow-on rate is close to just 3% (we DO follow-ons and have done many, so this doesn’t really apply to Caterina) They seldom invest in startups with a single founder. SuperForecasters rely on their own judgment. The same two rarely, if ever, co-invest in the same startups.