VC Daily Digest - 04/09/2023

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Your Monday to Saturday Daily Dose of Venture Insights, Funding Updates and Startup Stories Delivered Straight to Your Inbox. Stay Informed, Stay Inspired and Stay Ahead In the World of Venture Capital !

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📢 Top Venture Capital News

Watered-down SEC fund disclosure changes still worth paying attention to: The SEC has recently passed a series of new fund disclosure rules that venture capital firms should be aware of, particularly emerging managers. While these rules are a diluted version of the initial proposals, they still carry significant implications, potentially making fundraising more challenging for VCs. The rules also shift the responsibility for any punishment for non-compliance onto GPs, who can no longer seek financial aid from their LPs. Key changes include new stipulations around preferential treatment, requiring firms to disclose any preferential treatment of an LP that could materially or negatively impact other LPs in the fund. More Here

Fund performance data unhelpful for LPs when it counts: Sometimes, but that information is of little value to LPs as they make decisions on where to invest their capital, PitchBook's quantitative analysts share in a new report. The performance of a general partner's previous private investment funds can predict future fund performance to a degree, but that's only with at least eight years of hindsight, according to PitchBook's latest Allocator Solutions report. More Here

VCs Who Wait Too Long For A Market Rebound Risk Losing Out On The Best Deals: In the current climate of dwindling venture funding, many startups are feeling the pinch, willing to take hits on valuations to keep operating. Yet, venture funds are holding back, waiting for a market rebound and a sense of assurance for their limited partners. History, however, suggests that the best opportunities often emerge during these uncertain times. Over the next 6 to 24 months, we may see some of the most legendary venture deals being made. More Here

Veteran VC doesn’t think ARM’s IPO will have the impact that everyone is hoping it will: The startup industry is buzzing with anticipation as British chip designer ARM prepares for its IPO, a move expected to open the IPO window for many other companies. However, Heidi Roizen, a veteran VC and entrepreneur, believes that one "blockbuster IPO" might not have the significant industry impact many are predicting. In a recent conversation, Roizen also highlighted the importance of founders understanding the terms of their deals, the resurgence of "participating preferred" terms, and the evolving attitudes towards secondaries. She also discussed the role of strategic investors in today's AI startups, cautioning that while having the backing of giants like Salesforce or Oracle can be beneficial, there are also potential downsides. More Here

Sustainable Seafood Startups Are The Catch Of The Day: The seafood industry is in a state of flux, grappling with overfishing, climate change, and the limitations of farm-raised alternatives. In response, a wave of innovative startups is emerging, collectively raising nearly $3 billion to tackle these challenges. From smart-feeding technology by eFishery, a billion-dollar Indonesian aquaculture startup, to cell-cultured seafood alternatives by Wildtype and Finless Foods, these companies are charting a new course for the industry. However, the road ahead is uncertain, as the failure of Upward Farms reminds us that significant investment doesn't guarantee scalability. As aquaculture production hits record highs, the challenge lies in meeting growing demand in a sustainable, humane manner. More Here

📢 Top Startups News

Many Boom-Era Startups Will Face A Fundraising Cliff In 2025: The pace of a startup's fundraising can be a telling indicator of investor enthusiasm, with a longer lapse between rounds often signaling a loss of momentum. According to a Crunchbase analysis, the average time between Series A and Series B rounds for U.S. startups over the past decade is approximately 27 months, rarely extending beyond 38 months. However, the first five months of this year saw the average time lapse hit 31 months, the longest span in at least 12 years. While some startups may be able to wait it out longer due to larger round sizes in 2021, the reality remains that startups struggling to raise their next round rarely deliver big exits. More Here

Crypto funding in August wasn’t as good as the numbers may lead you to believe: Despite an initial surge in August, crypto and blockchain startups are still facing a challenging funding environment. Venture capitalists invested $819 million across 91 companies in August, a 51% increase from July. However, this figure is largely due to significant rounds raised by Haqqex and BitGo, and without these, there would have been a dip in investment. Comparing to the same time last year, there's a 53% decline in funding, continuing a trend of decreased interest in the digital asset industry since Q1 2022. To surpass second-quarter levels, startups would need to raise an additional $960 million in September, a feat that seems unlikely given the current climate. More Here

Walmart pays $3.5 billion to increase stake in India’s Flipkart: Walmart is making a bold bet on India's digital economy, investing $3.5 billion in the first half of 2023 to acquire shares from key stakeholders in Flipkart and resolve liabilities with PhonePe shareholders. This aggressive investment strategy, which has resulted in Walmart owning around 80% of Flipkart, comes at a time when other companies, including Amazon, are scaling back their spending in the region. More Here

Are YC Valuations Really Too High?: The debate around the high valuations of early-stage startups graduating from Y Combinator (YC) is a recurring one. Despite 75% of the current summer cohort being pre-revenue and 81% seeking their first external capital, YC has a reputation for launching startups at high prices, especially notable in H2 2023. However, YC's performance justifies these valuations, with approximately 4.5% of its startups achieving "unicorn" status since 2010 and an impressive annual return of 176%, net of dilution. The high valuations reflect the potential of these startups, and if YC didn't deliver quality opportunities, they wouldn't secure investments at above-market rates. More Here

📢 Featured: Today’s Featured Tweet

“You’re Too Early” — The Why And How to React?

Recently we shared a tweet on - Most founders get rejected like this and they completely misunderstand this which leads to taking the unproductive path and trying to impress investors. But This means entirely different. Check this out this. 👇

📢 Top AI News

X’s privacy policy confirms it will use public data to train AI models: In a recent update to its privacy policy, X has announced its intention to collect biometric data, job and education history from its users. This data, along with other publicly available information, will be used to train the company's machine learning and AI models. The change, spotted by Alex Ivanovs of Stackdiary, has led to speculation that X's owner, Elon Musk, may be planning to use this data for his AI venture, xAI. Musk has confirmed that only public data will be used, and no private information will be accessed. More Here

From China to Brazil, here’s how AI is regulated around the world: The rapid growth of generative AI models has prompted global governments to explore ways to harness AI's transformative power while mitigating its potential risks. Countries like Israel and Japan have updated existing data, privacy, and copyright protections, while others like the UAE have issued broad AI strategies. Despite industry leaders like OpenAI advocating for international cooperation on AI regulation, concrete laws targeting AI are still scarce. As lawmakers grapple with these challenges, countries like Brazil are developing comprehensive AI laws, focusing on user rights and risk assessments, while others like Italy are investing in workforce training to mitigate the impact of digital transformation. More Here

AI’s Dirty Little Secret: Stanford Researchers Expose Flaws in Text Detectors: In an exciting development, researchers from the University of Leicester and the Yunnan Key Laboratory for Palaeobiology have utilized cutting-edge scanning technology to bring a 'fossil monster' back to life, so to speak. This creature, which roamed our planet half a billion years ago, has been meticulously recreated, providing us with a unique glimpse into our planet's distant past. It's a testament to the power of technology and the relentless curiosity of science. More Here

How businesses can achieve greener generative AI with more sustainable inference: Generative AI is revolutionizing business efficiency and innovation, but it's not without its challenges. The most energy-intensive and costly aspect of AI model-building is inference, the process of analyzing new data based on stored intelligence. This process, when deployed at scale, can consume vast amounts of power, leading to increased costs and carbon emissions. As AI continues to become mainstream, it's crucial that we strike a balance between implementing sustainable solutions and maintaining quality and throughput. More Here

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📢 Top Startup’s Fundraising News

A cellular ag startup with a real moat raised $3.5M: The rise of cellular agriculture is not just about lab-grown meat anymore. Stephanie Michelsen, founder of Jellatech, is harnessing this technology to produce lab-grown collagen, a byproduct with numerous applications beyond food. Despite the mixed reception of lab-grown products, Michelsen's innovative approach, which recently secured a $3.5 million seed round, highlights the untapped potential of cellular agriculture beyond the realm of meat substitutes. More Here

Jude is building a bladder health champion raised $4.24M: Jude, a London-based startup focusing on bladder health, has secured a $4.24 million seed round to expand into the US. With 2.3 billion people experiencing bladder problems, the startup sees a significant opportunity in this underserved market. Jude's current offerings include a bladder strength supplement and a range of absorbent products, along with a support hotline offering free advice from trained specialists. With plans to launch a digital consultation service and potentially add in-house urologists or doctors, Jude is set to fill the gap between invasive treatments and simple coping mechanisms for bladder health issues. More Here

🗞️ Interesting Weekday Reading On: Startups, Technology & VC

• 📰 Why it's Better To Raise Less Capital In The First Round? Read More

• 📮 The Game-Changing Clause For Entrepreneur Read More

• 📑 How To Convince Investors That Your Startup Can Give Maximum Return To Them? Read Here

• 🗃️ How Do Investors Protect Themselves from Down rounds ? Read Here

• 📜 Decoding Startup Valuations with the Venture Capital (VC) Valuation Method Read More

• 📪Hidden Trap Of Convertible Note and Liquidation Preference Multiples Read More

• 📑 Decoding Sequoia Capital: How Do They Dominate the VC Landscape? Read Here

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✍️Written By The Venture Crew Team

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