Venture Capital’s Rosetta Stone

Venture Capital. What was once the exclusive sport of kings, is going mainstream. Even though venture backed technology IPOs are taking a break and mutual funds are fiddling with the value of their stakes in private companies, the world of private investing remains on center stage as the opportunities for market value creation by private companies continue to dwarf value creation opportunities in the public markets. But to many, the private markets are increasingly confusing and dramatic (as in the life and death of unicorns), and are crying out for order.

There are a few forces at play: Angel investors became angel syndicates and gave rise to seed funds. The JOBS Act is giving rise to crowdfunding, bringing the ability to invest directly in private companies to households across America. Incubators and accelerators are increasingly dotting the startup landscape. Corporations, seeking access to promising technologies, are again investing in private companies in record numbers. Banks and non-bank lenders are mixing debt with stock warrants. Traditional Limited Partners (LPs), which once invested only in venture capital funds, are now joining family offices and trying to invest directly in private, venture-backed growth companies. And while interest rates were tweaked in December for the first time in years, public stock mutual funds continue to reach for return in a low interest rate environment by investing directly in private companies and holding their positions. …

The Toxic Term Sheet: Founders Beware!

Its official. The unicorn has jumped the shark. …

I live in the Washington DC metropolitan region, within miles of the Central Intelligence Agency and I’m shocked that people, including our elected officials, seem to be downplaying the criminal break-in at the Office of Personnel Management (OPM). This break-in could affect up to 18 million people and this is just the first inning.

OPM is generally known as the government entity that manages pension, health and insurance benefits for retired Federal employees and their families. It is also the organization that holds and processes the majority of security clearance paperwork. …


John Backus

John Backus is an Early Stage VC at New Atlantic Ventures (@navfund). Focus on disruptive businesses: e-commerce, security, education, health care.

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