VC dollars in Latin America still strong for startups | What slowdown? Some VCs ramp up investments | NVCA: Disclosure legislation would harm innovation
Seed and angel investing in Latin American startups reached about $300 million in the first quarter of this year, with early stage funding around $1.3 billion - a 160% increase from a year ago, according to Crunchbase data. But a dip in late-stage funding contributed to an overall decrease in funding to $3.4 billion, down 30% from the fourth quarter last year, the data showed.
Despite an expected slowdown in startup venture capital, recent weeks show funds including Leading Edge Capital and Base 10 Partners continue to close on new investments. "Venture groups have consistently come back to market faster than anticipated as they react to the market -- faster raises, increased check sizes and quick follow-on rounds," explains Beezer Clarkson, partner at Sapphire Ventures.
The National Venture Capital Association joined other industry groups opposing legislation that would require the identities of individuals investing in private funds to be reported to the Securities and Exchange Commission. "The amendment's harm to small businesses and the innovation ecosystem is incongruent with the larger bill's goal of increasing U.S. competitiveness with China and other countries," they wrote.
The lack of initial public offerings and weak performance of companies that have recently gone public have cooled the level of investment in mature startups, as well as their valuations, according to a report from PitchBook Data and the National Venture Capital Association. "We expect to see the shift in the venture ecosystem illustrated in the data over the next couple quarters," the report said.
Founders can protect their relationship with a co-founder by drawing up a partnership agreement that includes the responsibilities in their roles and addressing potential future scenarios, writes Alisa Cohn, an executive coach who works with startups and other companies. "Just like a marriage prenup, [an agreement] guides you and your cofounder through important topics that will affect your relationship and your company," Cohn says.
Entrepreneurs can help their own finances by ensuring their business has ongoing profits, using the right tax-minimizing strategies and developing a business that can be sold in the future, writes Melissa Houston, a CPA and financial strategist for CEOs. "Business owners who don't know their business numbers do a disservice to their business due to a lack of understanding of how it generates profit," Houston writes.
To truly hire "inclusively," write your job descriptions without too many requirements, advertise the job where it will reach unrepresented communities and confine interviews to elements of the role, writes Cynthia Owyoung, Robinhood's vice president of inclusion, equity and belonging. "Creating and executing an inclusive hiring process involves a great deal of intentionality and consistency," she says in her book, "All Are Welcome: How to Build a Real Workplace Culture of Inclusion that Delivers Results."
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