Overall, Cooley's data pointed to a year marked by slow but steady improvement in the financing environment. In 2010, deal volumes reached a level not seen in the last five years. Median pre-money valuations increased across all deal stages and saw a significant increase in "up rounds" versus flat/down rounds. Up rounds represented 60% of all financings in 2010, a level not seen since 2008. Additionally, the percentage of recapitalization transactions fell in 2010, though the number of tranched deals remained flat from prior years.
This is the story of ARC Angels, a new Angel network based in New York. They are not only looking for investment opportunities, they are still looking to grow the ranks of their own membership from 33 to 99 angels.
Forbes Insights, in association with CIT, recently published the report “U.S. Small Business and Middle Market Outlook 2010”.
Deal activity was down from Q1, but there were positive signals as well.
One of the primary complaints about venture capitalists is that the "value add" they promise when they submit an LOI is akin to a campaign promise. In today's market, VCs haven't been able to exit many of their investments, so instead of serving on 3 or 4 boards, they may be serving on 6 or 8.
Selling a business is a little bit like an elimination-round tennis tournament. A lot of people make it to the tournament, but as you advance from one round to the next, the challenges get tougher, and at each stage, a lot of good players get eliminated.
Silicon Valley venture capitalists often invest in the youngest start-ups. But now some venture-capital firms are partly outsourcing that investing to others.
As banks saw increased competition for commercial & industrial lending, credit standards began to ease in the second quarter, according to the Federal Reserve. Of the senior loan officers surveyed in July, 12.5% indicated a relative easing of credit on large and middle-market borrowers (revenues in excess of $50 million), and 14.5% indicated a relative easing of credit for smaller firms, the first time credit standards have eased for small firms since 2006.
The venture capital industry rode high up to and during the dot-com boom but has suffered a vicious cycle of losses since the bubble burst. U.S. venture-capital funds raised each year from 1999 to 2007 have posted median annualized returns ranging from a 0.3% gain to a 7.7% loss, says research firm Preqin. Not surprisingly, fund raising has now come to a near halt.
Wall Street Journal article by Tom Barkley. Declaring small businesses as "central" to tackling unemployment, the Fed chief said not enough is being done to ensure that financially sound companies can obtain loans.
March 29, 2011
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