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5 Crowdfunding Concerns Worry Professional Investors

Startup Professionals Musings

I would summarize the qualms and feedback from professional investors as the following: Crowdfunding platform costs trickle down to angel groups. The new audit, due diligence, and liability requirements from the JOBS Act, now levied on equity crowdfunding portals, could dramatically increase the costs and restrictions on angel groups.

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5 Equity Crowdfunding Reflections Before You Sign Up

Startup Professionals Musings

I would summarize the qualms and feedback from professional investors as the following: Crowdfunding platform costs trickle down to angel groups. The new audit, due diligence, and liability requirements from the JOBS Act, now levied on equity crowdfunding portals, could dramatically increase the costs and restrictions on angel groups.

Equity 411
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On Bubbles … And Why We’ll Be Just Fine

Both Sides of the Table

And this is happening in mezzanine (pre-IPO) deals as well. And post IPO deals, although these tend to correct more quickly. If everybody is over-paying for early-to-mid stage deals you’d imagine that these all need to feed into a frenzied M&A and IPO market that will garner big returns for these risks investors are taking.

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London and Tel Aviv unicorn alumni produce most startups

VC Cafe

Atomico’s founder Nicklas Zennstrom recently called the end of the high valuations era and urged founders and VCs to remove the stigma from down rounds. As mentioned in the Battery Ventures “State of the Opencloud report” 2022 , the bar is high for these private unicorns to transition into successful IPOs.

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2023 Global Venture Reports were Gloomy, but there are reasons to be optimistic

VC Cafe

Many startups extended runway, cut costs and took on painful down rounds or expensive debt to avoid raising in 2023. It’s not just a cost consideration, but a desire for independence and neutrality. Those ‘band aids’ are running their course and it might get worse (i.e.

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On the Road to Recap:

abovethecrowd.com

The pressures of lofty paper valuations, massive burn rates (and the subsequent need for more cash), and unprecedented low levels of IPOs and M&A, have created a complex and unique circumstance which many Unicorn CEOs and investors are ill-prepared to navigate. In Q1 of 2016 there were zero VC-backed technology IPOs.

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Venture Outlook 2016

Both Sides of the Table

As I pointed out in this post about the changing structure of the VC industry , private tech companies are delaying IPOs and thus privately held tech investors are reaping more of the value prior to an eventual IPO so public investors must have felt compelled to respond. 25% “down rounds? The response?

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