Special purpose vehicles were always the sort of tool investors used only occasionally, in special circumstances. A hot deal. A founder who didn’t want 100 angels on the cap table. A one-off opportunity that didn’t quite fit inside a fund’s mandate. SPVs were the exception.
In 2025, they stopped being that. As Forbes put it
The National Venture Capital Association’s October 2025 update to its model stock purchase agreement didn’t make headlines outside the venture bar, but it quietly did something meaningful: it formally incorporated tranched financing mechanics into the model documents. That might sound like a technical tweak, but it’s actually a recognition of how common milestone-based investments have
I had a chance to sift through Pitchbook’s U.S. VC Valuations Report for the first quarter of 2024. The data point that really jumped out at me was the increase in down rounds. The number of flat and down rounds as a proportion of all VC deals has been rising consistently since the first quarter of 2022, reaching 27.4% of all VC deals in Q1 2024, the highest level in ten years.
Startling, but predictable. Companies raised capital during the venture frenzy of 2020 and 2021 at high valuations. Many startups that had since failed to reduce their cash burn when the fundraising market turned sour in mid-2022 are now facing the prospect of having to raise capital at a discount to their last valuation.
This trend has implications for founders, investors and companies, as down rounds can trigger anti-dilution provisions, dilute existing shareholders and create challenges for companies seeking to raise additional funding. And there’s reason to believe the worst is not yet behind us. The incidence of down rounds during historic bear markets indicates there is still plenty of room for valuations of venture-backed companies to fall further. The rate of down rounds in the aftermath of the 2008 financial crisis rose to nearly 36% of venture deals, which was actually dwarfed by the 58% of deals during the dot-com bust.Continue Reading Navigating the Downside: The Rise of Down Rounds in 2024 VC Deals
Every founder of a growth startup dreams of a big, successful exit — a sale of the company for millions of dollars. But that dream could be shattered if the investors are able to cause the company to be sold prematurely with proceeds only equal to or barely exceeding the investors’ liquidation preferences, leaving little
Earlier this year, Union Square Ventures Managing Partner Fred Wilson famously referred to corporate VCs as “The Devil”, when he asserted that companies should not be investing in other companies, that they should be buying other companies but not taking minority positions in them, that the “access” rationale for corporate venture is a reason
Are VCs incentivized to lose money? This is the provocative assertion made recently (and again) by Kaufman Foundation Senior Fellow Diane Mulcahy in the Harvard Business Review. Some of us who are interested in this issue probably recall the equally incendiary piece she co-authored in 2012 for KF boldly entitled “We Have