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💡 Corporate VC expected to be less active, take a smaller piece of the venture pie
by Marina Temkin, author @ Venture Capital Journal
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Corporate VC expected to be less active, take a smaller piece of the venture pie | Venture Capital Journal
Highlights:
- In 2019, US companies received $135.5 billion in venture funding, $57 billion of that deal activity had participation from at least one CVC
- CVC’s investment activity has decreased 17 percent during the first quarter of 2020, while total global VC activity receded only 2 percent in Q1 2019
- VCs that spun out from corporations and are now independent, but still rely on their original parent for capital, will be less impacted than their more traditional CVC counterparts
- CVCs will lead fewer rounds during the downturn and will be making fewer decisions without participation from traditional VC firms
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💡 Covid-19: Pressure points: The economic impact on the European VC industry
by Aaron White and Victor Chiew, Of Counsel and Senior Associate @ Herbert Smith Freehills
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COVID-19: Pressure Points: The economic impact on the European venture capital industry (Europe) - updated 22 April 2020
Key points:
- Decline expected in VC deal volume over the short to medium term, particularly for start-ups in the travel, leisure, events and retail sectors
- UK Government announced the creation of the co-investment “Future Fund” (£250M). Between £125K and £5M in the form of convertible loan notes for any eligible UK-based company
- BPI France is setting aside €80M to invest in startups
- The Dutch government is increasing its guarantee of start-up loans from 50% to 67.5% for loans of up to €266K, while Sweden has extended its existing support for starting a business from 6 to 12 months
- There may also be a shift towards more investor-friendly deal terms: participating preference shares (uncapped or 3-5 times the amount originally invested) ; liquidation preferences (2-4 times) ; anti-dilution protection ; redemption rights ; board representations and warrants.
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💡 Startup funding during the crisis: What’s really going on?
by Amy Lewin @ sifted.eu
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Startup funding during the crisis: What's really going on? | Sifted
- Investors are still investing (even if some have their focus diverted to helping portfolio companies)