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

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.

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

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

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

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

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

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

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,...

Photo via Getty

A New Bubble Is Forming for AI Startups, But Don’t Expect a Crypto-like Pop

By Kate Clark · Feb 2, 2023 1:44pm PST · 3 comments

Venture capitalists have dumped crypto and moved on to a new fascination: artificial intelligence. As a sign of this frenzy, they're paying steep prices for startups that are little more than ideas. Thrive Capital recently wrote an $8 million check for an AI startup co-founded by a pair of entrepreneurs who had just left another AI... Venture capitalists have dumped crypto and moved on to a new fascination: artificial...

Stripe co-founder and CEO Patrick Collison. Photo via Bloomberg

Stripe Should Have Gone Public Already; Volition Raises $675 Million Fund

By Kate Clark · Jan 26, 2023 11:32am PST

Stripe co-founder and CEO Patrick Collison. Photo via Bloomberg

Stripe Should Have Gone Public Already; Volition Raises $675 Million Fund

By Kate Clark · Jan 26, 2023 11:32am PST

You can’t overstate the reverberations a Stripe initial public offering—or even the glimmer of one—would have on startup investing. As my colleagues reported today, the payment software company has told employees it plans to go public or allow them to sell stock in the next year.I doubt even a looming deadline for early stock awards could force... You can’t overstate the reverberations a Stripe initial public offering—or even the glimmer of...

Photo via Bloomberg

Founders, Beware. An AI Chatbot May Have Written That Pitch Rejection

By Kate Clark · Jan 19, 2023 11:36am PST

Founders, remember that note in your inbox from a venture capitalist who’s “decided not to invest” but “would still like to stay in touch”? It might have been written by an artificial intelligence chatbot.Venture capital investors are tripping over themselves to buy stakes in OpenAI, the company behind the ultra popular new AI tool ChatGPT,... Founders, remember that note in your inbox from a venture capitalist who’s “decided not to invest...

OpenAI co-founder Sam Altman. Photo: Bloomberg

What OpenAI’s ‘Bonkers’ Deal Structure Means For Silicon Valley

By Kate Clark · Jan 12, 2023 2:31pm PST · 7 comments

Microsoft’s expected investment in OpenAI, destined to be one of the biggest startup stories of the year, comes with a whole lot of strings attached. It’s a deal structure that two lawyers told me this week they had never seen before in VC dealmaking, and that one venture capitalist described as “really bonkers.” But the arrangement could... Microsoft’s expected investment in OpenAI, destined to be one of the biggest startup stories of...

Photo via Bloomberg

Insight’s New Fund & VC’s Worsening Diversity Problem

By Kate Clark · Jan 5, 2023 1:58pm PST · 2 comments

New efforts to back minority entrepreneurs and fund managers are relatively few and far between these days, especially compared to 2020, when heavyweights such as SoftBank, Andreessen Horowitz and Google launched specialized funds to support underrepresented founders. One outlier is Insight Partners, which is planning to raise over $100... New efforts to back minority entrepreneurs and fund managers are relatively few and far between...

Bolt founder Ryan Breslow (left), FTX co-founder Sam Bankman-Fried, Fast co-founder Domm Holland (right). Photos by Getty Images.

The Troubled Investments VC Firms Tried to Erase

By Kate Clark · Dec 29, 2022 11:00am PST · 4 comments

Bolt founder Ryan Breslow (left), FTX co-founder Sam Bankman-Fried, Fast co-founder Domm Holland (right). Photos by Getty Images.

The Troubled Investments VC Firms Tried to Erase

By Kate Clark · Dec 29, 2022 11:00am PST · 4 comments

There’s no better way to avoid flack for a slew of bad venture capital investments than simply erasing evidence of those deals—right? That’s apparently what a handful of VC partners decided in 2022, a year many will remember for the collapse in startup valuations and several unforgettable blow-ups.In between marking down the value of their... There’s no better way to avoid flack for a slew of bad venture capital investments than simply...