Top 4 Curated Venture Capital Weekly Update for 09Aug2023💰
🗒️ Fearless Fund Lawsuit: Implications for Venture | TechCrunch
Global Village Space: The First Official Policy on Diversity in Venture Capital May Be Set by Lawsuit Against Fearless Fund
The American Alliance for Equal Rights, founded by conservative activist Edward Blum, has filed a complaint against Fearless Fund, a minority-focused venture capital fund, for unlawful racial discrimination. Fearless Fund, an early-stage venture capital firm based in Atlanta, focuses on funding women founders of color. The complaint alleges that Fearless Fund is racially discriminating against non-Black individuals by offering a $20,000 grant program exclusively for Black women who are small-business owners.
The program in question is called the Fearless Strivers Grant Contest, which is hosted four times a year in partnership with Mastercard. The American Alliance for Equal Rights claims that Fearless Fund’s program violates Section 1981 of the Civil Rights Act, which states that private contracts must be made and enforced without regard to race.
🗒️ Venture Capital - The Death of the SAFE?
Lexology: Despite recent and significant turmoil worldwide (including regional conflicts, rising inflation and interest rates, volatile capital markets and continuing supply chain issues), global venture capital investment remained robust (if not as strong as 2021) in 2022 and early 2023.
Although some remain wary, investors appear keen to continue to put their dry powder to use, particularly in early-stage start-ups where the potential multiples are most attractive. This is definitely true in the Middle East where there is significant liquidity and such capital needs to be deployed, therefore making venture capital investments more appetising, particularly in high-potential growth sectors, such as healthcare and technology, on a worldwide basis.
However, the investment landscape is changing. Whilst founders still come to the table expecting a standardised Simple Agreement for Future Equity (SAFE) to be used as an investment mechanism, we are seeing more and more investors pushing back on this and expecting something constituting a more formal investment agreement to be put in place to offer the investor more protection and control over its investment (particularly for higher value investments). Below, we consider what these new investment agreements may cover and whether this is truly the death of the SAFE.
🗒️ Breaking Down Barriers for Women in VC
Bloomberg: Tasneem Dohadwala, Founding Partner of Excelestar Ventures, discusses what female founders should know heading into the venture capital pitch room and where the industry could use some revision. Hosts: Carol Massar and Tim Stenovec. Producer: Paul Brennan.
🗒️ Valuation Compression Hits Early-Stage Venture Capital
Institutional Investors: As valuation continue to compress at venture-backed companies, even early-stage startups have begun to feel the pinch.
During the 2022 market downturn, early-stage companies — those at series B or earlier — held up better than their late-stage counterparts, reaching a median valuation of $45 million in the third quarter of 2022, up 50 percent from the highest quarterly figure before 2021. One reason for this is that early-stage startups are further removed from potential exits, so the impact from the heightened volatility in public markets is less severe than that experienced by late-stage companies.
But the latest valuation data shows that even early-stage companies have begun to lose steam. According to the latest VC report by PitchBook, which is expected to be published on Thursday, the median valuation of early-stage companies came in at $38.5 million in the second quarter.
Top 3 book summaries this week 📚
Focus by Daniel Goleman
Emotional intelligence pioneer Daniel Goleman tells us that there are three different types of focus: inner, other, and outer. Goleman tells us that a well lived life demands that we be nimble in each. By understanding and developing our skills in those three areas, we can improve our results in any area of our lives.
Start Thinking Like a Buyer by Jerry Acuff
The essence of Stop Acting Like A Seller and Start Thinking Like A Buyer is that to succeed in sales, you need to transform a selling experience into a buying experience. You do this by asking great questions that uncover whether a fit exists between what your customer needs and what you have to offer.
The Power of Habit by Charles Duhigg
I'm going to go out on a limb and say that there are some things in your business and life that you'd like to change. Maybe you want to start eating healthier, exercising, or figure out a way to manage your inbox. The Power of Habit shows us exactly how to do just that. Join us for 12 minutes as we explore how habits are formed, how you can change them, and how you can make the change last.