Author: Jason Rowley

How pro rata works in venture capital deals

TECHCRUNCH Jason Rowley Contributor Jason Rowley is a venture capital and technology reporter for Crunchbase News. More posts by this contributor: To the uninitiated, startup fundraising can be confusing. And even some of the resources designed to be approachable for the newcomer often raise more questions than they answer. So we’ve launched a series called “A Startup Takes Flight” to simply explain the dynamics of fundraising and deal terms. To do so, we’re following two entrepreneurs who started a company and raised some money from investors. The people, company and funds involved are fictitious, but the math and deal...

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Does it really matter how much your startup raises?

TECHCRUNCH Jason Rowley Contributor Jason Rowley is a venture capital and technology reporter for Crunchbase News. More posts by this contributor: “How much money does it take to get a startup off the ground?” Entrepreneurs and venture capitalists are faced with this question all the time, and the only right answer — it depends — is also the least satisfying. For any particular startup to succeed, it might take a lot of outside funding or very little. It’s contingent on the business a team is trying to build. There are plenty of companies that get off the ground with...

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Can Didi out-network Uber to win the global ridesharing market?

TECHCRUNCH Jason Rowley Contributor Jason Rowley is a venture capital and technology reporter for Crunchbase News. More posts by this contributor: Lately, news from the ridesharing industry seems to come in one of two flavors. There’s salacious coverage of the ongoing cultural and leadership woes of the industry’s current (and perhaps temporary) reigning champion, Uber. Meanwhile, every month or so, there’s a story about another nine-figure investment or buyout deal in the sector, led by anyone from incumbents in the ridesharing or automotive sector to Japanese billionaires backed by the likes of Saudi Arabia and Abu Dhabi. Here, we’re going to specifically focus on investment activity and the structure of its investment network in the ridesharing industry. This serves both to quantify the margin by which Uber currently leads, as well as identify the growing network of alliances by a potential usurper. Charting the ridesharing boom Ridesharing is one of the fastest-growing segments in the transportation market. According to data compiled by Statista, the number of users of ridesharing services will cross the half-billion mark in 2020. Statista further estimates that by 2020, global revenue of the ridesharing industry will be approximately $61.4 billion (USD) from 12 percent of the adult population in the various regions Statista’s analysis covers. This points to a strong but linear growth trajectory for the industry at a global scale. However, continued growth won’t come cheap....

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How SoftBank’s $100B fund is in a league all its own

TECHCRUNCH Jason Rowley Contributor Jason Rowley is a venture capital and technology reporter for Crunchbase News. More posts by this contributor: For the average American, the name “SoftBank” doesn’t mean much. It’s neither soft nor, technically, a bank. It’s a sprawling Japanese mobile carrier, internet service provider and holding company for other businesses ranging from cloud services and self-driving cars to energy trading. And its investment arm has bankrolled some of the world’s largest and most successful upstart technology companies, including many with serious name recognition here in the U.S. Like many large corporations, SoftBank invests its cash across a broad portfolio of asset classes. It also...

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Here are the best startup cities in the Midwest

TECHCRUNCH Jason Rowley Contributor Jason Rowley is a venture capital and technology reporter for Crunchbase News. More posts by this contributor: The American Midwest, to some, is just the “flyover states.” Its tropes — rusted-out factories, cornfields and calorically dense fried foods at state fairs — are well-known. However, it’s also increasingly home to more technology startups. Looking through the lens of startup and venture capital funding activity, we’ll be looking out how the Midwest and its metros stack up against one another. What we talk about when we talk about the Midwest What, exactly, constitutes the Midwest? A 2014 survey by FiveThirtyEight had 10 percent of respondents say that places like Wyoming and Pennsylvania are Midwestern states. That’s a stretch. At Crunchbase News, our definition of the Midwest will be based on the U.S. Census Bureau. Twelve states — Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Missouri, Nebraska, North Dakota, Ohio, South Dakota and Wisconsin — make up the official group of Midwestern states. Because there is no one “right” way to go about ranking the metropolitan regions in each of these states, we have opted to do a lot of rankings instead! We’ll be sure to keep track of which cities perform the best in each of these rankings, which will produce an all-around ranking for the best of the Midwest. Before we continue, it’s recommended that you don’t fly over...

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For startups, VC funding is always in season

TECHCRUNCH Jason Rowley Contributor Jason Rowley is a venture capital and technology reporter for Crunchbase News. More posts by this contributor: We’ve entered the dog days of summer. For many, that means time on the beach, backyard barbecues and, if you’re like us, seeking out the blissful respite afforded by a solid air conditioning system. In the land of startups and venture capital, however, summer can mean something a bit different. Today, we’re tackling the conventional wisdom that investors tend to slow down during these months. It’s a revisit of a piece we wrote last year, but this time, we’ve added a bit of a twist. Rather than...

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Inside the Q2 2017 global venture capital ecosystem

TECHCRUNCH Jason Rowley Contributor Jason Rowley is a venture capital and technology reporter for Crunchbase News. More posts by this contributor: One thing is clear: The market for startup equity is on firmer footing now than it was three months ago. With two successive quarters of growth, both in the number of deals struck and the amount of money invested, as well as a growing appetite on the part of public markets for shares in venture-backed startups, there’s reason for cautious optimism going into the second half of this year. Using data and projections from Crunchbase, this report from Crunchbase News dives deep into the state of the global venture capital ecosystem. Here, we want to assess investment and liquidity — money in versus money out. In the Money in section we’ll cover Crunchbase’s projections of how — and how much — the global venture capital ecosystem invested in Q2 2017. We’ll then evaluate how that result compares to both Q1 2017 and Q2 2016, giving us perspective on sequential quarter and year-over-year performance. In the Money out section we’ll review acquisition statistics and highlight other notable liquidity events, including the thawing market for technology IPOs. To help you digest this report, each section will contain a bullish and bearish key finding. Without further ado, let’s dive in. Money in Bullish key finding. Both deal and dollar volume are up across almost all stages, and round...

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Here’s where you’re most likely to randomly run into a unicorn in the US

TECHCRUNCH Jason Rowley Contributor Jason Rowley is a venture capital and technology reporter for Crunchbase News. More posts by this contributor: Where’s the best place to start a startup? It’s a perennial and somewhat intractable question entrepreneurs love to ask. And before you get your hopes up, we’ll start by saying there is no one right answer to this question. Like much in the world of startups and venture capital, it depends on a number of factors. But what we can tell is that networks matter. Networking through the city In network theory, there’s a concept called “homophily,” the tendency for similar individuals to connect with one another more frequently than two or more dissimilar individuals. The phrase “birds of a feather flock together” is a common, simple explanation of what the term means. So, if an entrepreneur wants their fledgling startup to join the unicorn club — the small but growing number of private companies that reach a $1 billion private valuation prior to a sale, IPO or untimely demise — or just wants to get on a firm financial footing, where is that most likely to happen? Here, we’ll provide an answer to that question with a bit of a twist. Finding the metropolitan regions that give rise to the most startups, where most of the unicorns are located or where most of the companies with, say, $50 million...

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