It’s happening slowly but surely. With every passing week, more venture firms are beginning to announce SPACs. The veritable blitz of SPACs formed by investor Chamath Palihapitiya notwithstanding, we’ve now seen a SPAC (or plans for a SPAC) revealed by Ribbit Capital, Lux Capital, the travel-focused venture firm Thayer Ventures, Tusk Ventures’s founder Bradley Tusk, the SoftBank Vision Fund, and FirstMark Capital, among others. Indeed, while many firms say they’re still in the information-gathering phase of what could become a sweeping new trend, others are diving in headfirst.
To better understand what’s happening out there, we talked on Friday with Amish Jani, the cofounder of FirstMark Capital in New York and the president of a new $360 million tech-focused blank-check company organized by Jani and his partner, Rick Heitzmann. We wanted to know why a venture firm that has historically focused on early-stage, privately held companies would be interested in public market investing, how Jani and Heitzmann will manage the regulatory requirements, and whether the firm may encounter conflicts of interest, among other things.
If you’re curious about starting a SPAC or investing in one or just want to understand how they relate to venture firms, we hope it’s useful reading. Our chat has been edited for length and clarity.
TC: Why SPACs right now? Is it fair to say it’s a shortcut to a hot public market, in a time when no one quite knows when the markets could shift?
AJ: There are a couple of different threads that are coming together. I think the first one is the the possibility that [SPACs] work and really well. [Our portfolio company] DraftKings [reverse-merged into a SPAC] and did a [private investment in public equity deal]; it was a fairly complicated transaction and they used this to go public, and the
- As the cannabis industry matures, winners have begun to separate themselves from the pack and position themselves as leaders in their categories.
- VCs are taking notice. They said they’re shifting their investment dollars from early stage firms to growth stage companies that already have a proven track record.
- According to data from PitchBook, VC investment in cannabis startups cratered this year, as the cannabis bubble burst and investors pulled back during the pandemic.
- Many investors told us they’re still open to new exceptional startups, however.
- Business Insider talked to six VCs who say that for a startup to get their attention, the company would need to have solid leadership, an idea that would completely innovate or create a category, and the ability to scale quickly, among other qualities
- Subscribe to Insider Cannabis for more stories like this.
The crowded cannabis market has thinned out since its boom in late 2018, and investors are becoming more reluctant to invest their cash.
So far this year, VCs have invested about $512 million in cannabis companies, a sharp decline from the $2.1 billion they put to work during the first nine months of 2019, according to data from PitchBook. And the money has shifted somewhat away from early-stage companies to later-stage businesses.
In the first quarter of 2020, VCs invested $71 million into angel- and seed-stage startups, or 46% of the total. In the second quarter of this year, that amount fell by more than half to $32 million. This quarter, angel and seed-stage firms have raised about $39 million, or 20% of the total funding.
Read more: Here are the top 14 venture-capital firms making deals in the cannabis industry, and where they’re looking to place their next bets
Many investors told us that they’re still open to startups with short track
- Business Insider asked seven venture capitalists to choose the two self-driving startups they believe have the most potential.
- At least one of the VC’s picks had to come from outside their firm’s portfolio.
- Many of their choices reflected the autonomy industry’s increasing focus on trucking and deliveries over ride-hail.
- Aurora Innovation was picked four times, more than any other company.
- Visit Business Insider’s homepage for more stories.
Self-driving taxis have taken longer to reach widespread adoption than experts predicted during the 2010s. That may be why venture capitalists see potential in autonomous-vehicle startups that are focused on applications, like trucking and mining, that present fewer technological challenges than ride-hailing.
Business Insider asked seven venture capitalists to pick the two autonomous-vehicle startups they believe have the most promise, with the caveat that only one could be a company their firm has invested in. Their selections reflected the industry’s increasing focus on business models that present a quicker path to commercialization than robotaxis and consumer cars.
These 10 startups could play a major role in that pivot.
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Opinions expressed by Entrepreneur contributors are their own.
Covid-19 has brought about a paradigm shift across industries, and venture investing is no exception. The pandemic and ensuing lockdowns have influenced consumer behaviour and preferences majorly, may be even permanently in some cases.
To understand how the investment landscape has transitioned amidst the Covid-19 pandemic and its impact on long-term investing, Entrepreneur India interacted with Vinnie Lauria, founding partner, Golden Gate Ventures, an early-stage venture capital (VC) firm in Southeast Asia. Lauria shared his views on the nitty-gritty of investments along with the bounce back plan for businesses.
Impact of Pandemic on Investment and Bounce Back Approach
Most of the work operations continue to be remote in Singapore and Indonesia despite lifting of lockdown restrictions. “In a market like Indonesia, people are working from home and locked down. There were certain presumptions about bounce back in a short time-frame,” says Lauria.
It is essential for term investors to check the growth level of companies and that their growth plans for the next decade has to be reflected over, he added.
Even though economies across the world have been hit by the pandemic, certain verticals, such as edtech and healthtech, have grown due to this phase.
VCs look upon trends, growth plan and future of the company while making an investment decision. However, COVID-19 has compressed the vision of five years into five months. At the same time, the growth scale has become swift over the past few months, especially for digital businesses. For instance, online education, grocery, health and tech startups have grown immensely, gaining from the opportunity in the market.
Investment Prospects During the Pandemic
Vinnie said that even during the pandemic, investments on both existing as well as new projects are being made.