Dalyn Bellingham

In 2023, sports tech racked up over $37 billion in M&A and financing deals, according to Drake Star. That’s a ton of momentum, especially with 790 private financing deals—up from 752 last year—driven mainly by early-stage companies. Sure, the competition for funding is tougher now than it was a few years back, but that hasn’t stopped exciting new ventures from popping up. Just look at Breanna Stewart and Napheesa Collier's 3-on-3 league, Unrivaled, Tiger Woods and Rory McIlroy's TMRW Sports, and the sports-betting content platform SoBet. With so many fresh ideas in play, the sports industry is set for an exciting future! #VentureCapital #Startup #SportsInvestments

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Imagine this: ABC Capital, the top PE firm in the industry who usually writes $30-100m checks, loves what you’re doing and wants to lead your seed round with a $3m check 18 months later, you need $5m more and they tell you it’s “not what we do” This happens more often than you’d think… So what do you do if a big firm wants to “make an exception and go earlier than usual”? We call these “toehold positions” This might seem like a champagne problem, but it’s a problem nonetheless and one we see very often First, why might you say yes? 1. Signal: it will make the rest of your fundraising round easier, because other investors want to co-invest alongside big brand name firms 2. Value Add: bigger firms can typically be more helpful, because they have more resources to support their portfolio 3. Future Financing: bigger firms have more capital to deploy, meaning that future rounds will be easier to pull together All of these sound great in theory, but let’s talk about what could go wrong — usually this plays out if the firm DOES NOT follow on 1. Signal: while the round that they invest in will likely be hot/oversubscribed once they commit, the signal if they choose not to follow on will be VERY bad. Why? In the case above, everybody knows ABC Capital could easily write another $5m into the Company, and assume if they were excited they would. In reality, anything less than $30m is still non-core for ABC Other firms think ABC must know something. Why bet against a tier 1 firm who has more information than you do? 2. Value Add: In many cases, small positions into small companies get lost in the shuffle of big firms. In theory, ABC has the resources to help, but in practice you might not be the internal priority Oftentimes big firms will help just as much (if not more) when they’re trying to win a deal vs support a subscale position 3. Future Financing: Keep in mind that toehold positions are a one-way option — ABC has not committed to following on, but you might have unknowingly committed to them. Why? If their competitors know that ABC is invested, they might not even try to beat them out in the next round They’ll often decide that ABC has better information and a lower cost base, so it’s not worth burning their team’s time Could mean that a deal that was meant to de-risk future financing could actually reduce negotiating leverage against your biggest investor To be clear: these transactions can be SUPER positive and great for the company. They can create inflection points of funding and stack the deck in their favor But we have seen this go very wrong Big firms choosing not to follow on has made fundraising close to impossible for many firms in the past 24 months In tech just look at the case studies of Tiger / D-1 / Coatue The takeaway: if you’re considering allowing a toehold position, go in eyes wide open and don’t underestimate the value of partnering with a firm where you are square in their sweet spot

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Don't call it a comeback - growth equity deals on the rise again per PitchBook. From the attached article: "According to PitchBook’s latest US PE Breakdown, PE growth investments were on the rise in the first half of 2024, accounting for about 23% of all PE deals and surpassing leveraged buyouts, which made up 19%. That reverses a long-time trend. Growth investments in the first half of 2024 are already exceeding those from the whole of 2023, when they accounted for 20% of all PE deals." The heightened cost of capital is obviously driving a lot of this dynamic. However... it is interesting to note that PE funds are seemingly more willing to take minority stakes - a dynamic that is historically more from the VC playbook. The hard truth is that, even in a challenging funding and valuation environment, growth stage companies - both PE-backed and VC-backed - still offer large institutional investors a compelling return profile. A growth-potential profile not often available in the public markets. This dynamic alone will push PE and VC private market investment through and beyond the current challenges... Endeavor Colorado Zeb King Tegan Stanbach Kathryn Dickson #privateequity #venturecapital #entrepreneurship #innovation #founders #startups #investing https://lnkd.in/gKZKwXct

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After an IPO valuing them at $3.5B 3 years ago, 23andMe wants to go private for $200m, signaling another tremendous SPAC failure Ok, I guess that's really a matter of perspective. If you were a pre-IPO 23andMe investor who was on the receiving end of that $3.5B valuation and were able to dump shares, you probably don't feel like it was a failure. But I'm certain there are thousands of very unhappy current shareholders who are wondering where all of their money went. This is especially true now that 23andMe has traded under $1 for approximately 10 months (it's down 96% since the SPAC merger enabled IPO) and is on the verge of being delisted. The NASDAQ gave them a 180-day extension in May to get the stock price up, but this is mostly a delaying tactic. And delisting is bad because if a stock isn't on an exchange, they're much harder to trade and usually go for even less desirable prices. So, in an attempt to save the company, founder and CEO, Anne Wojcicki, pitched the board that she and a group of investors would take the company private at its current market value of $0.40 per share or approximately $200m. But the board rejected the offer because it wasn't in the best interest of shareholders, didn't provide a premium over the current share price, was conditional, and not fully funded. In the meantime, they wrote, "we intend to immediately begin the process of engaging a consultant to advise the Special Committee on a revised business plan that would provide the Company with a path to a more sustainable financial profile and achieving profitability." They also said they'd begin entertaining offers from third parties. Ouch. In this weekend's premium issue of Omic․ly ($5/month), I review 23andMe's history in genetic testing and the rocky road they've traveled in their attempt to find a business model that's profitable. But if my opinions on IPOs gone wrong aren't your thing, the free issue has: 1) If only Ponce de Leon had known about IL-11 2) Why short-read sequencing can't ever get us a 'whole genome' 3) Frederick Sanger sequenced the first DNA genome, he didn't use 'Sanger Sequencing' to do it Catch it here: https://buff.ly/4drCRzG

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Zane Venture Fund — Top 13 #Atlanta #VC Firms: Excited to share that Zane Venture Fund AND Mosley Ventures have been named one of the top 13 venture capital funds in the Atlanta by Startup Savant. This recognition is more than a milestone—it's a reflection of our mission to drive meaningful change through the Healthy Human Economy™️ thesis. At Zane, we’re focused on investing in startups that tackle the social determinants of health like education, housing security, food access, climate resilience, and financial inclusion. We believe that supporting #companies in these areas not only fosters #innovation but also creates lasting health and economic outcomes in underfunded regions. Thank you to our #portfolio, #partners, and the incredible #community that supports our vision. Together, we’re proving that investing in a healthier, more equitable future isn’t just possible—it’s essential. Special thank you to our venture partner, Sig Mosley, whose firm is also mentioned, for continuing to be an important contributor to the Southeast #ecosystem. We are proud to have him on the Zane team. Let’s keep building 💪🏽 #HealthyHumanEconomy #VentureCapital #ZaneVentureFund #housingsecurity #foodaccess #health #education #SDoH #financialinclusion

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Summary: This article discusses various venture capital news, including insights and analysis of VC firms, trends in investments, and the impact of technology on the industry. Key takeaways: The article mentions that Insight Partners is potentially raising over $10 billion for its 13th fund, and OpenAI may be altering its complex corporate structure. There is a growing trend of Silicon Valley companies following China's lead and a discussion of how VC Mike Moritz believes the pace of work in tech companies should be "furious." Y Combinator is expanding the number of cohorts it runs, a new decentralized music streaming service called Tune.FM is introduced, and there is discussion about startups working on addressing climate change. Counter arguments: There may be concerns about the potential drawbacks of following China's lead, and the idea of a "furious" pace of work may raise questions about work-life balance and company culture. Some may argue that expanding the number of cohorts may lead to a decrease in the quality or effectiveness of Y Combinator's program. The article does not mention potential challenges or limitations facing the new decentralized music streaming service or startups working on climate change solutions. #venture #venturecapital #vc

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