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Venture Capital News
Medium
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The Longreach Group closes Longreach Capital Partners 4 at JPY 78 billion
- Longreach Group has closed Longreach Capital Partners 4 at JPY 78 billion.
- Longreach received commitments from a diverse group of global Limited Partner investors.
- The investor geographies were well balanced across Japan, North America, Europe, and non-Japan Asia.
- Longreach will continue its strategy of focusing on Japan-related control buyout investments through LCP4.
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SEBI’s New Rules for AIF Investments
- SEBI released a circular mandating AIFs to conduct valuations of their portfolio companies.
- The circular requires AIFs to follow the IPEV Guidelines for valuing portfolio investments.
- The guidelines specify valuation techniques such as discounted cash flows and net asset valuation.
- SEBI's new approach aims to provide investors with objective and realistic assessments of startup values.
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Medium
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Three Reasons to Watch MENA’s Venture Scene
- MENA is now rapidly transforming, driven by innovation, diversification, and reforms.
- Home to 500 million people, the region represents 6% of the world's total population.
- MENA boasts extensive digital connectivity. More than 88% of the population goes online daily.
- 70% of the population lives in large urban areas, which presents an opportunity for fintech to transform the financial services landscape.
- Venture capital funding in MENA has tripled from around $1 billion to approximately $3 billion annually since 2021.
- Mega deals, those exceeding $100 million in financing, have surged from negligible levels to approximately $1 billion annually.
- Governments across MENA are fueling a startup revolution, driven by a strategic push for innovation and diversification beyond oil.
- Capital market reforms have significantly bolstered investment activity in the region.
- Special economic zones such as DIFC and ADGM have become catalysts for economic growth in the region.
- MENA stands out as an exceptional region with its dynamic and expanding market, poised to become a key player on the global stage.
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Medium
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Startup Spotlight: Pump
- Pump is a startup that offers cost-saving solutions for SMBs by using group purchasing and AI-driven cloud spend analysis.
- The company operates as a certified AWS reseller, purchasing large volumes of cloud instances to secure discounts.
- Pump's AI helps businesses determine the optimal time to switch to longer-term contracts, optimizing cost savings.
- The company is on track to reach $10 million in annual recurring revenue (ARR) and plans to expand its solutions beyond AWS.
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Medium
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Why a 22 year old video game has me excited about the future of AI agents in games
- Gaming has embraced AI agents, with successful examples in RTS games like Starcraft 2.
- Players are excited about the prospect of using prompt-based mechanics to orchestrate teams of AI agents in games.
- The balance between player control and agentic automation will be key to making the game enjoyable.
- Games with management as the core loop, such as RTS games and simulation games, are best suited for AI agents.
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StartupDaily
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Why backing female founders is more than just a numbers game
- The issue of gender imbalance in venture capital goes beyond simple statistics.
- Female founders receive smaller funding amounts compared to their male counterparts.
- Flying Fox Ventures is introducing a female founder sidecar to address the imbalance.
- Addressing the entire ecosystem and including senior decision-makers in meetings with female founders are important steps.
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Medium
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Why and How should marketplace startups adapt to the Gen Z juggernaut?
- Gen Z depends on mobile devices for tasks ranging from research to completing purchases and prefers online or omnichannel experience.
- They heavily rely on social media for making shopping decisions and following influencers, leading to impulsive buying.
- Fast-delivery and price comparison are crucial for their shopping experience, and personalized recommendations are becoming increasingly essential.
- Marketplaces must prioritize understanding Gen Z's preferences and adapt to advanced search algorithms, visual search, personalization, and BNPL options.
- Gen Z also expects more from brands regarding sustainability, authenticity, and social media appeal in packaging design.
- Overall, marketplaces need to adjust quickly to the Gen Z consumer behavior shift.
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Medium
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Shareholder Agreements: Understanding Leaver Provisions and Vesting
- Leaver provisions and vesting are essential mechanisms for protecting a company's interests when shareholders leave.
- Leaver provisions distinguish between good leaver events (beyond a shareholder's control) and bad leaver events (fault on the part of the shareholder).
- Vesting is the process by which shareholders earn their equity over time or by achieving specific milestones.
- Implementing both leaver provisions and vesting can protect the company, ensure long-term commitment, and create a motivated workforce.
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Medium
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Stemming a rising tide — welcome, c/side!
- Uncork Capital has led c/side's $6 million seed financing, bringing its total funding to $7.7 million.
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Medium
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VC Data Series Part 2: Why Venture Capital Needs to Be More Data-Driven
- VCs work an average of 55 hours per week, with significant time spent on manual data collection and evaluation processes.
- Traditional VC processes rely on subjective judgment and can lead to inconsistent and biased decision-making.
- Data-driven solutions like automated deal sourcing, predictive analytics, and enhanced network analysis can improve VC efficiency and effectiveness.
- Adopting data-driven methodologies is crucial for VCs to stay competitive, make informed decisions, and promote inclusiveness in funding.
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Medium
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Venture #3: How to find your investment philosophy
- Developing a personal investment philosophy is essential for consistent decision-making and to avoid chasing trends.
- Investment philosophy is a personal belief system about how markets operate and guides your approach to investing.
- Investment strategy is derived from your philosophy and is the roadmap for achieving financial goals.
- In venture capital, defining your investment philosophy helps determine strategies and target companies.
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Saastr
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5 Interesting Learnings From HubSpot at $2.5 Billion in ARR
- HubSpot has reached $2.5 billion in ARR and continues to grow at an impressive rate.
- Customer count is still growing at 23% with 228,000 customers.
- HubSpot is balancing growth and profitability, with strong non-GAAP earnings.
- Sales and marketing expenses are being slowly reduced, aiming for 30%-35% in the long term.
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20VC
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Akshay Kothari, Co-Founder @Notion: How Notion Has More Money Than Ever Before & Why The Way Startups Fundraise is Broken
- Akshay Kothari is Co-Founder at Notion, raising $340M+ with latest valuation at $10BN.
- In an interview, Akshay discusses the downsides of founder mode and the power of veto power for founders.
- He talks about the fundraising process, including choosing Coatue and Index for a $50M raise at $2BN valuation.
- Akshay also highlights the involvement of Sequoia in a $270M raise at $10BN valuation and the challenges of scaling.
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Medium
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Shareholder Agreements: Full-Ratchet Anti-Dilution Clauses in Company Fundraising
- Anti-dilution clauses are designed to protect shareholder's ownership stake during the company’s fundraising rounds.
- Full ratchet anti-dilution clause is more restrictive for companies planning for multiple fundraising rounds. It reduces the conversion price of preference shares to match the share issuance price of the next round when converted to ordinary shares.
- Weighted average ratchet anti-dilution clause is the standard protection for investors. It aims to reduce the impact of dilution and take into account factors such as the total shares outstanding and the capital that could have been raised.
- Overly diluting the ownership of founders or essential team members can remove their incentive to actively participate in driving the business growth.
- Negotiating the anti-dilution clause as a "Pay to Play" provision can balance the interests of both investors and the company.
- Ultimately, anti-dilution clauses play a critical role in protecting investor interests while creating challenges for companies seeking to raise additional capital in the future.
- Companies should approach anti-dilution clauses with caution, carefully weighing their long-term implications on ownership structure, founder motivation, and future fundraising potential.
- By carefully weighing the pros and cons and seeking expert advice when needed, entrepreneurs can make informed decisions that protect both investor interests and the company’s long-term success.
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Medium
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Spotlight on Fintech: How African Startups are Revolutionizing Finance:
- The African fintech sector has experienced significant growth, with over 5,200 tech startups categorized as fintechs.
- Between 2021 and 2023, African fintechs attracted $2.7 billion in venture capital, despite a global slowdown in tech funding.
- Nigeria, South Africa, Kenya, and Egypt are the main players in the African fintech landscape, accounting for most of the continent's fintech companies and funding.
- The future of fintech in Africa looks promising, with projections estimating a 10% annual growth rate in the financial services market and revenues reaching $230 billion by 2025.
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