PitchBook News - How to fire a VC

Plus: VCs turn to sustainable ag, fintech deals decline in a return to normalcy, M&A wins for energy & more
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The Weekend Pitch
January 28, 2024
Presented by DealCloud, by InTapp
(Mara Potter/PitchBook News)
Venture firms are feeling bloated these days.

Years of ballooning assets prompted investment firms to grow their headcount, and many now want to slim down. The Information just reported that several Tiger Global employees who focused on raising capital have left the firm, and that startup accelerator Techstars shed 7% of its staff, primarily in support and operations roles.

When it comes to investment professionals, rarely are partners laid off directly. The exception is when a firm shuts down, as was the case with OpenView last month, when senior partners let go of most of the firm's employees.

"In venture, you're rarely fired on the spot in the way you would be in an operating company," said a founder of a prominent venture firm who asked to remain anonymous.

This VC chief has been having conversations about finding what he called an 'elegant exit' for several of the firm's investors. He has told them that they won't be principals or partners on the firm's next fund and that they should take the next six months or so to figure out what they'll do next.

I'm Marina Temkin, and this is the Weekend Pitch. You can reach me at marina.temkin@pitchbook.com or @MTemkin on X.
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Trivia

(Martin Barraud/Getty Images)
Despite the high hopes of VCs, 2023 was the worst year for M&A in a decade, according to the latest NCVA Venture Monitor. Only $26.7 billion in M&A deal value was generated. How many VC-backed companies were acquired this year?

A) 1,007
B) 917
C) 456
D) 698

Find your answer at the bottom of The Weekend Pitch!
 

VCs turn back to nature

(Hsing Chin/Getty Images)
From biopesticides to biofertilizers, agricultural biologicals offer a sustainable alternative to the synthetic chemicals often used in the agricultural industry.

And while agrochemical giants continue to dominate the market for both conventional and sustainable inputs, VCs are pumping significant capital into the sector, logging nearly $1 billion in VC investment in 2023 and noteworthy rounds for startups like Indigo and Elemental Enzymes.
 

Fintech deals decline in return to normalcy

(Eugene Mymrin/Getty Images)
After a whirlwind two years, the fintech vertical is showing signs of normalization, according to PitchBook's latest Emerging Tech Research analyst note, Fintech: State of the Industry. Investors in 2023 generated $34.6 billion across 2,055 deals, drops of 43.8% and 32.4% respectively and a return to pre-pandemic numbers.

The note dives into the latest trends and opportunities within the vertical as it approaches a new stage.
 

Winners and losers in M&A dealmaking

(Anton Petrus/Getty Images)
Overall in 2023, global M&A deal count reached 40,200—the third highest total on record—while deal value recorded the second lowest annual reading in a decade.

Results varied greatly by sector. Energy had a glowing moment of M&A prosperity last year, driven by consolidation in the traditional energy space. By contrast, dealmaking pace in technology and healthcare slowed significantly.

Our 2023 Annual Global M&A Report, sponsored by Liberty GTS, explores deal trends in each sector.
 

Quote/Unquote

SEC Commissioner Hester Peirce
(Chris Maddaloni/Getty Images)
"A few defiant chickens might survive the final rule, but today's action will render SPACs a much less useful pathway for companies to enter the public markets."

—SEC Commissioner Hester Peirce, commenting on rule changes and amendments made this week related to SPACS, or special purpose acquisition companies.
 

Stay tuned

Keep an eye out for these insights and research reports coming out this week:
  • Q4 2023 Agtech Report
  • Q4 2023 Information Security Report
  • Q4 2023 Carbon & Emissions Tech Report
  • January Global Markets Snapshot
  • Analyst Note: Blended Wing Body Aircraft
 

Trivia

Answer: D)

In 2023, 698 VC-backed companies were acquired. You can read more about the current M&A outlook here.

This edition of The Weekend Pitch was written by Marina Temkin, Jacob Robbins, Madeline Shi and Samantha Steele. It was edited by James Thorne and Ron Prichard.

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