Top 4 Curated Venture Capital Weekly Update for Aug 24, 2022 💰
🗒️ Y Combinator alumni raise $80 million for DAO to back crypto startups
Techcrunch: Groups of people seeking to invest together have been turning to the crypto-native DAO (decentralized autonomous organization) structure for a collective decision-making framework. While an investment DAO typically can only have up to 100 members in order to stay compliant with SEC rules, Orange DAO has found a way to bring over over 1,000 Y Combinator alumni together to back web3 startups through an associated venture fund.
Orange DAO just raised $80 million in funding, mainly from two strategic investors: layer-one blockchains Algorand and Near, general partner Ben Huh told TechCrunch in an interview.
🗒️ Here’s Another Reason Why Infrastructure Funds Are Raising Record Amounts of Money
Institutional Investor: Whether or not the recently passed Inflation Reduction Act leads to the breadth of renewable energy projects envisioned by its sponsors, the legislation has kicked off a burst of investor energy around the asset class and a windfall for infrastructure funds. The renewed fundraising comes at a good time for alternative investments as venture capital and private equity activity cools down.
In North America, the amount of capital raised for infrastructure-focused funds was over $90 billion in the first half of 2022, “running at twice its usual pace,” according to the latest alternatives report from Preqin. Infrastructure represented 21 percent of all private markets fundraising in the first six months of 2022, according to the report. That’s a huge bump up from an average of 8 percent of total private capital raised by infrastructure between 2010 and 2021.
🗒️ Venture capital, private equity investors worried about valuations – Preqin
Pensions & Investments: Venture capital and private equity investors are becoming concerned over the exit environment, and the majority believe the asset class is overvalued, a new survey from Preqin shows.
A total of 80% of surveyed investors believe that venture capital is overvalued, with either considerable room or some room for price reduction, according to Preqin's Investor Outlook: Alternative Assets H2 2022 report released Tuesday.
Venture capital is the asset class the research firm views most at risk from current economic and market volatility because venture-backed firms have much in common with publicly listed technology companies that have experienced significant investment losses since the beginning of 2022, according to the report. The report cited as an example the year-to-date loss of 53.2% of ARK Investment Management's Innovation exchange-traded fund.
🗒️ Lessons On Raising Capital From KuCoin CEO
Forbes: The importance of raising capital cannot be understated. It is essential to any business’s success and should be considered carefully. For example, if a company wants to expand, it requires excess money. This can be acquired by raising capital. There are many different ways to do so, each with its advantages and disadvantages. The most common methods are equity financing, debt financing, and grants.
Equity financing is when you sell a stake in your company to investors in exchange for capital — often the most challenging type of financing. Doing so can be very advantageous because you retain control of your company. Debt financing is when you borrow money from lenders and agree to pay it back with interest— a good option if you have strong credit and are confident in your ability to repay the loan. Finally, grants are when you receive funding that does not need to be repaid.