Read the story here. Advertise at Before It's News here.
Profile image
By Points and Figures (Reporter)
Contributor profile | More stories
Story Views
Last hour:
Last 24 hours:

New Money in Venture Capital

% of readers think this story is Fact. Add your two cents.

Venture capital is having a bit of a moment.  Companies that are venture-backed are going public and weekly we seem to hear about another “unicorn”, which is a venture-backed company that is worth $1B dollars or more.  Of course, they don’t tell you about all the failures.

I saw two interesting pieces on VC in the last two days.  The Financial Times had an opinion piece by Richard Waters on VC.  It’s behind a paywall, but essentially it says new entrants are remaking the VC space.  In the “old” days, venture capital was a tight-knit club.  The new entrants like Softbank and Tiger Global have huge sums of cash and aren’t afraid to spend it.  I have seen Softbank try to buy a market when it came to co-working and WeWork.  It didn’t work out so well but other companies they have invested in have done very very well.

Well enough so they are still investing.

One thing I postulated years ago is that as long as international central bankers keep creating money and holding interest rates at close to 0%, or even negative rates in many cases, there will be a marked change in the risk appetites of investors. Initially, money went into the stock market and continues to be there.  However, I am seeing big companies and pools of capital start to reach for yield in bond markets, buying riskier higher-yielding bonds instead of safer government securities.  They need the return to cover their liabilities.

The returns have attracted new entrants that don’t subscribe to the rules of the club and the club isn’t exactly happy about it.

Packey McCormick wrote an interesting blog about a company, Unit 21.  I am invested in Catalytic, which was the first company in this no-code space.  This is what was interesting to me about the blog post.

As Unit21 started talking to VCs after Q1, Tiger Global got in touch. Tiger had already done a lot of its due diligence upfront, and when they spoke, Tiger asked Unit21 for two things: 

  1. To send them its numbers. 
  2. A target valuation range. 

The next day, Tiger sent Unit21 a term sheet to lead its $34 million Series B at a$300 million valuation, 25% above the high end of its valuation range. When Tiger wants to win a deal, it doesn’t fuck around. I asked Trisha what Tiger looked at when pricing the round, and she said it was simple: 

  1. Customer and revenue growth
  2. Total market size
  3. Opportunity to expand into new areas

“For everything else,” she told me, “they trust it’ll get done.” 

Unit21 signed with Tiger, and ICONIQ Capital, the family office of Mark Zuckerberg, Sheryl Sandberg, Jack Dorsey, and Jeff Weiner, joined in, along with all existing investors. 

It was a huge round at a large valuation.  You hear stories of early-stage investors moving very quickly with little diligence but you rarely hear about it with later-stage deals.  The other thing to bear in mind is this was a “Series B”.  Back when I started investing in startups (2005) a Series B was sub $100M in valuation.

There are returns at Series B, but as Professor Steve Kaplan at Chicago Booth has shown in his data on venture investing, the real return is when you invest at Seed and Series A.  You have to be early to see the really consistent blowout returns.  When you get a company that is doing well, you need to press your bets and keep investing up to or beyond your pro-rata.  I learned that when I traded in the trading pit as well.  Cut your losers, figure out how to scratch them if you can.  Press your winners.

Even with all the innovation and all the cool stuff being built, I still think that basic economic principles and math win.  I also think that when you are investing in the space, it pays to act like a caddy on the golf course and not the tournament director.

More money will try and find its way to startups.  I do think the traditional fund model is breaking down in some ways.  The trick will be the money has to find its way through someone that has access or insight into a particular idea/sector/thesis, and is trusted by the entrepreneur so they know the capital coming in has their back.

The post New Money in Venture Capital first appeared on Points and Figures.


Before It’s News® is a community of individuals who report on what’s going on around them, from all around the world.

Anyone can join.
Anyone can contribute.
Anyone can become informed about their world.

"United We Stand" Click Here To Create Your Personal Citizen Journalist Account Today, Be Sure To Invite Your Friends.

Humic & Fulvic Liquid Trace Mineral Complex

HerbAnomic’s Humic and Fulvic Liquid Trace Mineral Complex is a revolutionary New Humic and Fulvic Acid Complex designed to support your body at the cellular level. Our product has been thoroughly tested by an ISO/IEC Certified Lab for toxins and Heavy metals as well as for trace mineral content. We KNOW we have NO lead, arsenic, mercury, aluminum etc. in our Formula. This Humic & Fulvic Liquid Trace Mineral complex has high trace levels of naturally occurring Humic and Fulvic Acids as well as high trace levels of Zinc, Iron, Magnesium, Molybdenum, Potassium and more. There is a wide range of up to 70 trace minerals which occur naturally in our Complex at varying levels. We Choose to list the 8 substances which occur in higher trace levels on our supplement panel. We don’t claim a high number of minerals as other Humic and Fulvic Supplements do and leave you to guess which elements you’ll be getting. Order Your Humic Fulvic for Your Family by Clicking on this Link , or the Banner Below.

Our Formula is an exceptional value compared to other Humic Fulvic Minerals because...


It Always Tests at 9.5+ pH

Preservative and Chemical Free

Allergen Free

Comes From a Pure, Unpolluted, Organic Source

Is an Excellent Source for Trace Minerals

Is From Whole, Prehisoric Plant Based Origin Material With Ionic Minerals and Constituents

Highly Conductive/Full of Extra Electrons

Is a Full Spectrum Complex

Our Humic and Fulvic Liquid Trace Mineral Complex has Minerals, Amino Acids, Poly Electrolytes, Phytochemicals, Polyphenols, Bioflavonoids and Trace Vitamins included with the Humic and Fulvic Acid. Our Source material is high in these constituents, where other manufacturers use inferior materials.

Try Our Humic and Fulvic Liquid Trace Mineral Complex today. Order Yours Today by Following This Link.

Report abuse


    Your Comments
    Question   Razz  Sad   Evil  Exclaim  Smile  Redface  Biggrin  Surprised  Eek   Confused   Cool  LOL   Mad   Twisted  Rolleyes   Wink  Idea  Arrow  Neutral  Cry   Mr. Green

    Load more ...




    Email this story
    Email this story

    If you really want to ban this commenter, please write down the reason:

    If you really want to disable all recommended stories, click on OK button. After that, you will be redirect to your options page.