John Gannon’s Post

Have you read Forge's latest Private Market Update? The February Private Market Update shows some encouraging signs in the VC funding market, even as VCs invest in fewer deals overall. Overall global venture capital deal value rose by nearly 4% in January 2024 year-over-year, despite an almost 24% decrease in the number of funding rounds, according to S&P Global Market Intelligence. Read more at #ForgeGlobal #privatemarkets #venturecapital #privatecompanies

📈 Is a ~600% return in 2 years possible? Absolutely! 🚀 One of my investments, Mirza International, delivered a staggering ~7x return on my capital in just around 2 years. How did it happen? Let me share the story. Mirza International's success story revolves around a classic demerger. Redtape, a renowned brand, was spun off from its parent company, triggering a remarkable financial outcome. Honestly, I didn't foresee such an extraordinary result. My initial attraction to Mirza International in Nov'21 was rooted in the fundamental strength of the brand "Redtape". It boasted immense popularity in tier 2 and 3 cities, exhibited robust growth rates, and demonstrated capital efficiency. What's more, the valuation was incredibly attractive, hovering around 15 P/E. Despite having the capacity to invest more, I chose to commit just INR 1.08 Lacs, a decision that I later regretted deeply. This experience motivated me to delve deeper into spinoff investing, thoroughly analyzing its complexities to ensure I capitalize on it more effectively in the future. I've taken the time to document my insights in an article on spinoff investing for Chop Chop Finance. Give it a read if you want to capitalize on such opportunities. The link is shared below https://lnkd.in/gkH52Spv Follow Nayan Goswami and Chop Chop Finance for more updates. PS: Building a global fintech platform, stay tuned for updates.

🚀 Unlocking Liquidity: A Primer on Venture Secondary Transactions 🚀 Ever wonder how shareholders of private companies get the chance to liquidate their shares before an IPO? 📈 Look no further! Here's a quick summary of the fascinating world of venture secondary transactions. In the dynamic landscape of private markets, venture secondary transactions provide an opportunity for early investors and employees to cash in on their equity before an IPO or acquisition event. 💰💼 🔍 What's a Secondary Market? 🔍 Secondary markets are where investors buy and sell securities (stocks or bonds) that have already been issued by a company. It's the next step after the primary market where securities are issued directly. 💡 Why Venture Secondaries Matter 💡 - Enable liquidity for early investors and employees. - Offer a chance to cash in on equity compensation before an exit event. - Extend investment opportunities for excluded or under-allocated investors. 🌐 Private vs. Public Markets 🌐 Public stock markets are transparent, liquid, and accessible to most investors. Private secondary markets, on the other hand, lack centralized infrastructure, leading to less transparency and accessibility. 💼 Types of VC Secondary Transactions 💼 1. Structured liquidity programs: Tender offers and auctions initiated by the company. 2. Direct secondary sales: Investors selling shares directly to other investors. ⚙️ Other Private Market Secondaries ⚙️ - Fund secondaries: One limited partner selling their stake to another LP. - Secondary buyouts: One private equity firm selling its stake to another firm. - GP-led secondaries: Investment fund managers selling a stake from one fund to a newer fund. 📈 The Boom in Venture Secondaries 📈 Venture secondary deals have surged over the years due to the growth of the primary VC fundraising market. Companies are staying private longer, and secondaries offer liquidity while remaining private. Let's embrace the world of venture secondary transactions and empower private companies and their stakeholders! 🌟 #VentureCapital #SecondaryTransactions #LiquidityOpportunities #PrivateMarkets

Read Clarence Claus's article on the trends of the 2023 VC market https://lnkd.in/ecKKQW8Y

A discussion topic in my Graduate Level #financialanalytics and #valuation course I am teaching at New Jersey Institute of Technology. With the exception of seed rounds, VC valuations in Q3 continued to descend from peaks registered in 2021 and early 2022. Fewer companies met investors' higher bar for funding, which forced many to resort to bridge financings or stave off raising new capital by cutting costs. Despite IPOs of prominent companies, their listings performed relatively poorly, indicating reduced investor enthusiasm for VC-backed companies, according to the Q3 2023 US VC Valuations Report, sponsored by Morgan Stanley at Work. Seed deal sizes experienced a modest ascent. The valuation gap between seed and early-stage startups continued to shrink. The estimated percentage of down rounds climbed to a 10-year high at 17.1%, up from 13.5% in Q2. PitchBook Morgan Stanley Jeanensis Ventures 144 TrailBlazer Fund and The Global Trailblazers Podcast Oqulus Tech LLC New Jersey Institute of Technology

There is a new era of venture and a new asset class that focuses on more wins with less capital in less time. The average investor will not invest in venture deals because the amount of capital and the amount of time violate their comfort level, but almost all investors will happily invest in a duplex because of the immediacy of cash flow. WHY can’t SaaS investing be more like real estate AND like tech? Well, it’s about it… STAY TUNED! CASH FLOW + MULTIPLES = Singles and Doubles!  #Investing #VentureCapital

The number of active investors in US VC, which we defined as making two or more deals, plummeted by 38% in the first three quarters of 2023 compared to the same period last year, according to PitchBook data. That translates to 2,725 fewer firms making deals. Learn more: https://lnkd.in/gPZiUR4h

"The hurdle for Series A funding is a lot higher than it was a year ago — and investors in seed-stage companies are having to respond." That was the first sentence of a TechCrunch article I read recently. And we're seeing it firsthand at York IE. Series A investors have either remained on the sidelines or raised the floor in terms of the metrics required to fund companies. So we are spending a lot of time with our portfolio companies that are caught in the state of limbo this has created. The good news is, founders are becoming more thoughtful in regards to efficient growth and finding a path to profitability vs. pursuing growth at all costs. A company that might have defaulted to "we need to raise a Series A" in the past may now realize that they only need a bridge round to get to profitability. And then they won't have to raise anymore. I'm also cautiously optimistic that M&A activity will increase in the sub-$250M market this year, which could be a good path for some companies. 2023 was a tough year, but we knew it was coming and were prepared. I have a very positive outlook for 2024 and am excited for what's to come.

The value of the most mature startups in the United States that need to find an exit neared the $1 trillion mark through Q3 2023. The figure underscores how weak the exit climate has been over the last two years and highlights the sheer mass of illiquid equity investments made into startups. #startup #secondaries #secondarymarket #capitalengine #privatecapital #liquidity

While IPO exits are rare in Venture Capital, it's encouraging to see positive projections surrounding moonshots. 🚀 Lives can change through venture capital without an IPO, but going public certainly doesn't hurt! According to a recent CNBC article, Morgan Stanley sees 10 to 15 more tech IPOs in 2024 and a better 2025. 📈 Hopefully, more headlines like this will encourage more fund formation and growth in the ecosystem. As I always say, the more people doing it right, the better. 💪#venturecapital #IPO #tech #growth #funding