Dealmaker by The Information Staff

Two times/week

Dealmaker

By The Information Staff

Reporters Cory Weinberg and Katie Roof tell you what’s coming next, who’s winning—and who’s losing—in the high-stakes world of startup investing.

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Recent Editions

Figma CEO Dylan Field. Photo by Bloomberg via Getty

Antitrust Threat to Figma-Adobe Deal Thwarts Hopes for VC Rebound

By Kate Clark · Jun 22, 2023 12:49pm PDT

Adobe’s $20 billion plan to buy design software startup Figma in September offered Silicon Valley venture capitalists brief relief from the downturn’s tight grip. But they might want to put the champagne away. European regulators plan to launch an investigation of Adobe’s deal, the Financial Times reported earlier this week. A few... Adobe’s $20 billion plan to buy design software startup Figma in September offered Silicon Valley...

Photo by Getty

The End of Megafunds

By Kate Clark · Jun 15, 2023 10:45am PDT · 6 comments

Megafunds may be a relic of another era in venture capital. That’s not a bad thing. Insight Partners has reduced the target of its next fund 25% to $15 billion, the Financial Times first reported this week. Other firms, like Tiger Global Management and TCV, aren’t on track to meet their initial ambitious targets either.There aren’t enough... Megafunds may be a relic of another era in venture capital. That’s not a bad thing. Insight...

Emad Mostaque. Photo via YouTube/Scale.ai

Stability AI Drama Spotlights VC Accountability

By Kate Clark · Jun 8, 2023 3:04pm PDT · 5 comments

Will the startup Stability AI be the first spectacular flameout of the new AI boom? That’s what I was asking myself as I read Forbes’ investigation into the three-year-old generative AI company, which raised $100 million at a valuation that last fall reached $1 billion. Without going into exhaustive detail, the article alleged the startup’s... Will the startup Stability AI be the first spectacular flameout of the new AI boom? That’s what I...

Photo by Getty

Google, Nvidia and Microsoft Offer What VCs Can’t

By Kate Clark · Jun 1, 2023 1:16pm PDT · 1 comment

Photo by Getty

Google, Nvidia and Microsoft Offer What VCs Can’t

By Kate Clark · Jun 1, 2023 1:16pm PDT · 1 comment

Welcome back,Amid all the hype for generative artificial intelligence, some venture capitalists have refused to join the fray. These young companies need so much capital and so much computing resources, the VC skeptics say, that they’ll have little chance of competing against Google, Amazon and other big tech companies that may soon have similar... Welcome back,Amid all the hype for generative artificial intelligence, some venture capitalists...

Bilal Zuberi. Photo courtesy of Lux Capital.

The Perils of Venture Patriotism

By Kate Clark · May 25, 2023 1:30pm PDT · 2 comments

Welcome back!U.S. venture capitalists seem to be gripped by patriotic fervor, with a growing faction urging their peers to back more companies that help the U.S. battle adversaries like China. That’s put other venture capital firms with large China footprints on the defensive, as I reported this week.The recent bout of nationalism has worried... Welcome back!U.S. venture capitalists seem to be gripped by patriotic fervor, with a growing...

Art via Shutterstock

An Accelerator Implodes, Leaving Founders in Shock

By Kate Clark · May 18, 2023 3:01pm PDT · 4 comments

If you ask a startup founder what they look for in an accelerator program, they’d probably hope for access to startup veterans and connections to prominent venture capitalists. By all accounts, they didn’t get much of that from Newchip, whose parent Astralabs last week entered into Chapter 7 bankruptcy, leaving creditors owed $4.8 million... If you ask a startup founder what they look for in an accelerator program, they’d probably hope...

Rewind AI co-founder Dan Siroker. Photo via Getty.

AI Startup Rewind Gets 170 Offers—and $350 Million Valuation in Unusual Fundraising

By Kate Clark · May 11, 2023 12:37pm PDT · 7 comments

Hungry venture capitalists inundated Rewind AI co-founder and CEO Dan Siroker the moment they caught wind of his artificial intelligence startup’s Series A plans, he wrote on Twitter last month. So he skipped the traditional fundraising process and tried something unorthodox.On April 14, he shared a link to an online form and asked investors to... Hungry venture capitalists inundated Rewind AI co-founder and CEO Dan Siroker the moment they...

A First Republic Bank branch in San Francisco. Photo by Bloomberg.

By Kate Clark · May 4, 2023 1:31pm PDT · 1 comment

A First Republic Bank branch in San Francisco. Photo by Bloomberg.

Apathy Valley

By Kate Clark · May 4, 2023 1:31pm PDT · 1 comment

The biggest bank failure since the financial crisis and the fourth bank failure of the year happened this week. But no one in Silicon Valley seemed to care. That’s probably because they’re all exhausted by the slow-moving train wreck that’s transpired over the past three months. Or because—after the fall of crypto exchange FTX last fall and... The biggest bank failure since the financial crisis and the fourth bank failure of the year...

Photo via Shutterstock

The Looming Layoffs for Venture Capitalists

By Kate Clark · Apr 27, 2023 12:32pm PDT · 2 comments

This week’s news that fintech investor Anthemis Group has cut 28% of its staff, which comes one month after Y Combinator slashed about 20% of its workers, suggests more venture capital layoffs are coming.The shrinking appetite of their limited partners means many will likely raise smaller funds, taking away resources to maintain headcount that... This week’s news that fintech investor Anthemis Group has cut 28% of its staff, which comes one...

Index Ventures Leads $50 Million Investment in AI Startup Weaviate

Index Ventures Leads $50 Million Investment in AI Startup Weaviate

By Kate Clark · Apr 20, 2023 11:00am PDT · 5 comments

Weaviate, an infrastructure startup whose technology is essential for companies trying to build generative AI tools, could probably have landed a higher valuation for its recent Series B given all the investor hype around AI right now. Instead, CEO and co-founder Bob van Luijt said he struck a quick deal after meeting with only three firms.... Weaviate, an infrastructure startup whose technology is essential for companies trying to build...

Photo: Shutterstock

The AI Rush Could Shake Up Venture Capital's Ranks

By Kate Clark · Apr 13, 2023 1:27pm PDT · 4 comments

We probably all know by now that artificial intelligence, particularly generative AI, is venture capital’s current obsession. What’s interesting, though, is that firms like Spark Capital and Greylock Partners, respectable outfits but generally not considered in the same league as Sequoia Capital or Benchmark, have led the industry’s latest push... We probably all know by now that artificial intelligence, particularly generative AI, is venture...

Photo by Getty

Bessemer Fights to Win $350 Million Valuation AI Deal

By Kate Clark · Apr 6, 2023 12:53pm PDT

Photo by Getty

Bessemer Fights to Win $350 Million Valuation AI Deal

By Kate Clark · Apr 6, 2023 12:53pm PDT

After months of writing about layoffs and cram downs, I stumbled across the rare buzzy deal in Silicon Valley this week. More than half a dozen venture capital firms have been vying for a stake in a San Francisco startup—EvenUp—that uses artificial intelligence to help personal injury lawyers compile claims using medical documents and case... After months of writing about layoffs and cram downs, I stumbled across the rare buzzy deal in...

Photo via Mercury

Startup Banks are in the Hot Seat

By Kate Clark · Mar 30, 2023 12:06pm PDT

We’re three weeks past the start of a once-in-a-generation banking crisis that saw the demise of a core startup institution, Silicon Valley Bank. Neobanks are feeling bullish: They picked up billions in new deposits in what’s been their biggest-ever period of growth. As a result, investor interest in their businesses is picking up again. ... We’re three weeks past the start of a once-in-a-generation banking crisis that saw the demise of...

Photo via Good Eggs

The Coming Wave of Cram Downs

By Kate Clark · Mar 23, 2023 12:44pm PDT · 3 comments

What do Good Eggs, a startup that delivers $4.99 broccoli bunches, and Tonal, a fitness startup that sells $3,995 exercise equipment, have in common—other than a business model subsidized by venture capital? They’re both engaged in a painful type of financing known as a “cram down.” If you grew up in the era of easy money, ultralow interest... What do Good Eggs, a startup that delivers $4.99 broccoli bunches, and Tonal, a fitness startup...

Photo by Shutterstock

Venture Capitalists Made a Big Mess of SVB

By Kate Clark · Mar 16, 2023 3:30pm PDT · 25 comments

Venture capitalists just gave a master class in how not to handle a crisis. My sympathy goes out to the founders. They’ve been bombarded with conflicting advice for days, from all-caps emails written by panicked “seasoned” venture investors urging them to pull their funds out of Silicon Valley Bank, to emergency Zoom calls asking them to... Venture capitalists just gave a master class in how not to handle a crisis. My sympathy goes...

Founder and CEO Hans Swildens of Industry Ventures in his office. Photo by The San Francisco Chronicle/Getty.

Venture’s Limited Partners Look for a Way Out; SVB’s Meltdown

By Kate Clark · Mar 9, 2023 2:13pm PST · 3 comments

Founder and CEO Hans Swildens of Industry Ventures in his office. Photo by The San Francisco Chronicle/Getty.

Venture’s Limited Partners Look for a Way Out; SVB’s Meltdown

By Kate Clark · Mar 9, 2023 2:13pm PST · 3 comments

Silicon Valley Bank’s stock was in freefall as I wrote this, down 60%, after it announced a $2.25 billion share sale, partially to counter “elevated cash burn” at the startups it banks. That news set off a wave of panic, with some VC firms like USV warning their portfolio companies to move their funds, we reported earlier today. CEO Greg Becker... Silicon Valley Bank’s stock was in freefall as I wrote this, down 60%, after it announced a $2.25...

Josh Kushner and Marc Andreessen. Photos by Getty and Bloomberg

What Josh Kushner Can Learn From Marc Andreessen

By Kate Clark · Mar 2, 2023 3:19pm PST · 4 comments

There are different ways to ascend venture capital’s top ranks. Move fast, be loud and raise a lot of money. Or, build slowly, stay quiet and let the deals speak for themselves.For examples of these two approaches, just look at Andreessen Horowitz and Thrive Capital. Both launched near the depths of the 2009 financial crisis and both have... There are different ways to ascend venture capital’s top ranks. Move fast, be loud and raise a...

Stripe CEO Patrick Collison. Photo via Bloomberg

Stripe Is No Longer the Darling of Silicon Valley

By Kate Clark · Feb 23, 2023 2:44pm PST

The last few months have laid out Stripe’s dirty laundry for the first time. As a reporter who has for years tried to find the cracks in the company’s shiny facade, I more than welcome a balanced conversation about Stripe and its prospects. For so long, questioning Stripe’s valuation was the equivalent of a crime in Silicon Valley. As one... The last few months have laid out Stripe’s dirty laundry for the first time. As a reporter who...

Photo by Shutterstock.

Who’s to Blame for Venture Capital’s Bloat?

By Kate Clark · Feb 16, 2023 2:09pm PST · 4 comments

After I published last week’s column, which said limited partners were still pissed off at venture capitalists for misplaced bets made during the funding boom, my phone buzzed with a string of texts from a prominent venture capitalist.“LPs propagated all of this.” “They are just as accountable.”“Who gave Tiger all the money?”It’s a... After I published last week’s column, which said limited partners were still pissed off at...

Photo via Bloomberg

VC’s Limited Partners Are Still Pissed

By Kate Clark · Feb 9, 2023 2:13pm PST · 3 comments

Photo via Bloomberg

VC’s Limited Partners Are Still Pissed

By Kate Clark · Feb 9, 2023 2:13pm PST · 3 comments

The rush to join the Church of Sam Altman marked the beginning of an entirely new hype cycle, this time relating to generative AI. But venture capital’s limited partners are still reeling from the last cycle and their trust in startup investors might be at an all-time low.LPs, the individuals who represent family offices, funds of funds,... The rush to join the Church of Sam Altman marked the beginning of an entirely new hype cycle,...