Good day. Taxes may rise on venture profits. But could an increase be helpful in cooling down an overheated market?

The National Venture Capital Association says that the proposed taxes outlined by the White House in the American Families Plan would hamper venture-capital investment and innovation. And there is research to support this view.

But the timing of the potential tax increases could make arguing against them more difficult.

The venture market is currently awash in capital, stemming from both sky-rocketing returns and mega fund-raising. U.S. venture funds are sitting on a record $188.9 billion in dry powder, or the capital committed to them but not yet invested in startups, according to data provider Preqin Ltd.

VCs themselves are concerned about capital flows that are leading to rising valuations, cut-throat competition and potentially lax due diligence.

Justin Field, of the NVCA, says that those numbers mask the reality of what is happening in some technology sectors, such as climate-tech, that are only starting to grow and need more incentives rather than fewer.

The big overall numbers also miss that venture remains a small industry outside of the main hubs. If you exclude the top three states of California, New York and Massachusetts, the median venture fund raised last year was about $25 million in size, according to the NVCA. Such funds depend on family offices and high net-worth individuals backing them.

“They are the folks who will pay capital gains. They would be particularly hurt,” Mr. Field says.

And now on to the news...

Taking bets. A wave of deal making is afoot in the sports-betting world, as participants ranging from analytics firms to casinos look to cash in on the growing sector, WSJ's Benjamin Mullin reports.

• In the latest move, Denmark-based Better Collective A/S, which offers tools and media content to help subscribers place more-informed bets, said Monday it agreed to purchase rival Action Network Inc. for $240 million.
   
• Last week, DraftKings Inc., a digital entertainment and gaming company, purchased rights to a popular podcast by former ESPN host Dan Le Batard for $50 million. Also in April, gambling company Bally’s Corp. announced a $2.7 billion merger with online-gaming company Gamesys Group PLC.
   
• Several factors have set the table for deal making. Sports betting is being legalized across the U.S., creating markets in many states. At the same time, access to many of these markets is restricted, with many states limiting betting licenses to a relatively small number of holders. That has created an incentive for sports books to grow quickly and signal to licensers that they are worthy of recognition.

CVC Capital Partners is heading a $250 million investment in Acronis International GmbH, the cybersecurity company said Tuesday. The investment values Schaffhausen, Switzerland-based Acronis at more than $2.5 billion, WSJ Pro's Chris Cumming reports.

• Acronis was founded and is led by Chief Executive Serguei Beloussov, a Singapore-based entrepreneur and computer scientist who has formed more than two dozen companies.
   
• The company had initially planned to raise less money through the latest financing round but was persuaded to accept a larger investment, Mr. Beloussov said.

U.S. mutual-fund giant Fidelity Investments has drastically changed its view of what Jack Ma’s Ant Group Co. is worth after China’s regulatory crackdown on the financial-technology giant severely dented its growth prospects, The Wall Street Journal reports.

The Boston-based asset manager, which was among an elite group of global investors that bought into Ant three years ago, marked Ant shares in several of its funds at prices that implied a $144 billion valuation for the company at the end of February, according to regulatory filings. The prices were below what Fidelity originally paid for Ant’s shares, suggesting the firm believes it could incur a loss on the investment.

Season Three, a New York boot company, is raising capital via Republic, an investment crowdfunding website that allows backers of the brand to acquire a small sliver of the company itself. The startups on Republic are a diverse bunch focused on everything from energy to supply chain management to cannabis. Fashion companies, though, have traditionally been a weak spot for the website, writes WSJ’s Jacob Gallagher.

People

Escient Pharmaceuticals Inc., which is working on a drug to treat cholestatic and uremic pruritus, appointed Svetlana Makhni as chief financial officer. She was previously chief financial officer and head of operations at Bierman ABA. In September 2020, San Diego-based Escient Pharmaceuticals raised a $77.5 million Series B round led by Sanofi Ventures and Cowen Healthcare Investments.

Excision BioTherapeutics Inc., which is developing therapies to cure viral infectious diseases, named Christine Silverstein as chief financial officer. She was most recently CFO of Emendo Biotherapeutics. San Francisco-based Excision in February closed a $60 million funding round from investors including GreatPoint Ventures, Adjuvant Capital, Norwest Venture Partners, Anzu Partners, Cota Capital and Artis Ventures.

Kajabi, an Irvine, Calif.-based ecommerce platform for the knowledge economy, closed a $550 million growth equity round of funding, valuing the company at more than $2 billion. Tiger Global Management led the investment, which included additional support from TPG Capital, Tidemark, Owl Rock Capital, Meritech Capital and Spectrum Equity. Scott Wagner, former chief executive of GoDaddy and current Tidemark advisor, will join Kajabi’s board.

Affinia Therapeutics, a Waltham, Mass.-based startup developing treatments for genetic diseases, closed a $110 million Series B round co-led by EcoR1 Capital and Farallon Capital Management. Additional new investors Avidity Partners, Casdin Capital, GV, Octagon Capital, Perceptive Advisors, RA Capital Management, TCG Crossover Management and Woodline Partners also participated in the round, along with existing backers Atlas Venture, F-Prime Capital, Mass General Brigham Ventures and New Enterprise Associates. Caroline Stout, partner at EcoR1 Capital, will join the company’s board.

SafetyCulture, an Australian workplace safety and quality management software provider, picked up a $73 million investment, bringing the company’s valuation up to $1.6 billion. Insight Partners led the round, which included participation from Tiger Global Management, Index Ventures and Blackbird Ventures.

Genies Inc., a Los Angeles-based avatar technology startup, collected $65 million in Series B funding. BOND led the round, with Mary Meeker joining the company’s board. New Enterprise Associates, Breyer Capital, NetEase, Dapper Labs and Coinbase Ventures also participated in the investment.

Path Robotics Inc., a Columbus, Ohio-based designer of an autonomous robotic welding system, secured $56 million in Series B financing. Addition led the round, and was joined by returning investors Drive Capital, Basis Set Ventures and Lemnos.

JupiterOne Inc., a Morrisville, N.C.-based cyber asset-management provider, landed $30 million in Series B funding. Sapphire Ventures led the round, which included participation from Bain Capital Ventures. Anders Ranum, partner at Sapphire Ventures, joined the company’s board.

Boost Payment Solutions, a New York-based business-to-business electronic payments provider, completed a $22 million Series C round. Invictus Growth Partners led the investment, with co-founder and Managing Partner William Nettles joining the board. Existing investors including Mosaik Partners, Ingwe Capital and North Atlantic Capital also contributed to the round.

Avenue 8 Inc., a San Francisco-based residential real estate brokerage, grabbed $14 million in Series A funding. Threshold Ventures and Craft Ventures co-led the round, which included participation from Zigg Capital and Good Friends. Jeff Fluhr, general partner at Craft Ventures, will join the board.

Pawp Inc., a New York-based veterinary telehealth platform, snagged $13 million in Series A financing led by Lux Capital.

Zoomo, an Australian e-bike startup, nabbed a $12 million investment. AirTree Ventures led the funding, which included additional support from investors including Clean Energy Finance Corp., Maniv Mobility and Contrarian Ventures.

CrowdSec, a collaborative cybersecurity startup, was seeded with a $5 million investment from Breega.

Anodyne Nanotech Inc., a Boston-based drug delivery startup, closed a $4.2 million seed round from investors including Velocity Partners and Big Pi Ventures.

Gatheround, a team bonding and community engagement platform formerly known as Icebreaker, raised $4 million in funding co-led by Homebrew and Bloomberg Beta.

• Verizon to sell Yahoo, AOL for $5 billion to Apollo
   
• Apple and ‘Fortnite’ maker Epic Games trade arguments over App store
   
• Decision on Donald Trump’s Facebook ban is coming on Wednesday. Here’s how it will work.
   
• Yellen to appoint senior Fed official to run top bank regulator
   
• Auto makers retreat from 50 years of ‘just in time’ manufacturing
   
• SpaceX capsule returns four astronauts safely to earth in nighttime splashdown

• Why start-ups fail (Harvard Business Review)
   
• The great talent reshuffling of 2021 has begun (Hunter Walk, Medium)
   
• Buy Nothing blew up on Facebook. Can it keep growing without it? (Protocol)

This newsletter was compiled by Yuliya Chernova and Zachary Cole.

WSJ Pro Venture Capital is a premium service of The Wall Street Journal. We cover venture capital and the global startup ecosystem. Share your tips, comments and questions: vcnews@wsj.com

The Team: Matthew Strozier, Yuliya Chernova, Brian Gormley and Marc Vartabedian.

Follow us on Twitter: @wsjvc, @ychernova, @BrianPGormley, @marcvarta.