Pre-Money: July 8, 2024

Halftime results, innovation's road, new VC approaches, GenAI caution and more

Brought to you by Hiive, the marketplace for investing in private, VC-backed companies

The Vibe

The week’s most important happenings

Slow week as the US turned 248 and we passed the point where more of this year is behind us than ahead. Here’s what’s on the radar:

  • Halftime results for venture in 2024

  • The road ahead for innovation

  • New VC approaches

  • Secondaries in the spotlight

  • GenAI caution flags abound

  • and more…


The week’s top performance indicators

Based on publicly available data from Thompson Reuters, NASDAQ, CNN Business & other third-party sources. As of July 5 market close.


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Dots & Lines

The week’s top takeaways

  • Stats after the first half: It’s only been a week, but the stats from the first half on venture investment into companies are rolling in from varied data sources. Things are looking up, albeit slightly. Deal sizes were up 17%, to an average of $14.4M in Q2, showing growth across all stages, and valuations rose across all stages too. Overall deal volume was flat to down, with precise numbers coming as the quarter’s last wave of deals get reported in coming weeks. AI drove $14B of global funding in the quarter, a record-setting 28% of the overall funds hauled in by companies. While healthier than last year, the environment for IPOs and mergers still remains slow in all geographies, so most of the 1,404 Unicorns will likely cool their heels in private markets awhile longer. Many expect election season to distract enough that greener pastures may have to wait until 2025, but ideally the trends from Q2 will continue lifting all boats in the meantime.

Carta’s data shows valuations coming back, albeit slowly

  • America’s winding innovation road: In the spirit of celebrating the birthplace of venture, pundits opined on the challenges and opportunity ahead if America wants to continue its path of innovation. Marc Andreessen and Ben Horowitz of a16z fittingly shared their “Little Tech Agenda,” a provocative call for regulators to get out of the way of startups innovating to create jobs and growth. Government, the manifesto says, should limit its often-misguided and onerous regulations that tend to paralyze upstarts and preserve Big Tech’s massive advantages across many sectors and domains. In a parallel piece, the American Millenium, Packy McCormick reassures us in a more celebratory tone that things are going well and should continue to do so if government and entrepreneurship continue to operate in synergy as they did to create the last century’s massive breakthroughs. Hopefully this type of thinking will prove prophetic and technology innovation will help America circumvent this century’s challenges just like it did the last.

Smart Humans Podcast

In the latest episode of Smart Humans, Slava Rubin talks with Affirm CEO and Founder Max Levchin on entrepreneurship, angel investing, and the future of finance.

Deal Points

A few items of interest

  • Leading boutique early-stage funds are back in the market with Union Square Ventures targeting $275M for climate and AI and Benchmark going for $425M for AI

  • Innovative fund manager General Catalyst offers a new form of financing where they underwrite sales and marketing costs and are paid back with a revenue share and fee

  • Fund-of-funds manager Industry Ventures closed Fund VII with $900M, to invest in emerging managers plus a 20% allocation to secondaries, reflecting the growing appeal of the $100B+ venture secondaries market

  • Coding startup Magic AI is raising $200M at a $1.5B valuation, 3x its latest price, reflecting excitement about AI-assisted software development

  • Andreessen Horowitz (a16z) signed for a new 34,000 square foot Headquarters on high-priced Sand Hill Road, in another sign of their durability after raising a fresh $6.9B of funds

  • Robinhood acquired Pluto, an AI research startup founded three years ago, to add AI to portfolio strategy for investors

  • SpaceX, the most valuable private company in the U.S., will attempt the first commercial spacewalk along with setting other precedents as it embarks on this month’s Polaris Dawn mission

  • Seaya, an investment manager based in Madrid, closed $320M for Seaya Andromeda, Southern Europe's first climate-tech fund

  • Caution flags abound regarding returns on GenAI investing, with Goldman’s recent report questioning how long it will take for $1T of capital spend to pay off, and Sequoia asking where the $600B of revenue to make it worthwhile will come from

  • Internet sage Mary Meeker of Bond Capital took a look at what she expects will be AI’s significant impact on universities

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The Forecast

Looking ahead to this week

As business picks back up, keep your eyes peeled for:

  • Earnings reports due from Delta Airlines ($DAL) , Ericsson ($ERIC) and Wells Fargo ($WFC)

  • May consumer credit on Monday

  • Producer Price Index (PPI) and Consumer Price Index (CPI) Inflation prints on Thursday and Friday

  • Consumer sentiment report on Friday

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