Media reported that venture capital group G Squared raised $1.1 billion in investment funds.
The mentioned venture capital group is currently looking to tap into growing investor demand for its strategy of buying pre-existing stakes in startups. The information was released to the media this week.
It is worth noting that most venture capitalists are currently interested in acquiring new equities of companies that are at an early stage of existence. G Squared’s strategy involves injecting the bulk of its funds into existing securities purchased directly from startup employees and investors who want to sell a certain amount of their holdings. Currently, the corresponding secondary market is flourishing amid a decrease in the number of public listings and takeovers that allow shareholders to sell their equities.
Founder and managing partner of G Squared Larry Aschebrook during a conversation with the media said that the venture capital group will now have assets under management worth about $4 billion. He also noted that many fund managers are facing pressure from institutional investors to return cash, which is difficult as the initial public offering process slows.
Larry Aschebrook told the media that for years, companies and traditional growth managers have viewed secondaries as something that was bad.
In August, it was published information that the number of startups that failed in the United States has increased by 60% over the past year. This dynamic threatens millions of jobs and has the potential to negatively impact the US economy as a whole.
Data from Carta, a provider of services to private companies, shows that 254 venture-backed clients went bankrupt in the first quarter. This indicator is more than seven times higher than the figure recorded in 2019. Among the bankruptcies are Tally, a financial technology company valued at $855 million, and WeWork, a desk rental firm that has raised $16 billion in debt and equity.
The increase in startup shutdowns is seen against the backdrop of a slowdown in funding for early-stage AI firms.
As we have reported earlier, Banking Technology Firm Amount Raises $30 Million.
