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Why This Firm Is Going All in on Venture Capital Funds Now
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By Yuliya Chernova, WSJ Pro
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Good day. Venture firms are knocking on more doors in search of capital. It can be a tough sell in today’s slumping venture market, but some investors are happy to answer the call, seeing a chance to get into successful venture funds.
About a quarter of limited partners expect to deploy less capital to venture capital in the next 12 months, while a third expect to commit more than in the prior 12 months, according to a November survey of nearly 400 investors by research firm Preqin. The share of those planning to invest more has grown since a year ago, according to the data provider.
Among the limited partners seeking venture capital exposure is San Francisco-based GREE LP Fund. The fund-of-funds manager recently closed on $52.75 million to back U.S.-based venture funds.
The majority of GREE LP Fund’s capital comes from Tokyo-based publicly traded gaming and media company GREE Inc. Other investors include Japanese corporations and a Chinese family office.
GREE LP Fund has already invested in funds from Khosla Ventures, Upfront Ventures, NFX, Hustle Fund, Behind Genius Ventures and others since it began deploying its fund in 2021. It backs both established and emerging funds. In the emerging category, GREE LP Fund is looking to gain access to startups working on crypto, climate, defense and other technology sectors, in addition to traditional software.
We spoke with Youngrok Kim, partner and head of investments for GREE LP Fund, about the firm’s approach.
WSJ: What is it like to deploy capital into venture funds now for you as a new LP?
Kim: [In the past] established firms weren’t open to new LPs. Some of their LPs decreased their allocation or some decided not to reup. That opens the door to new LPs like us. We can start a relationship with them. Everything is cyclical. Now it’s a little bit easier.
Continue reading.
And now on to the news...
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PHOTO: GABBY JONES/BLOOMBERG NEWS
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What the demise of the Adobe-Figma deal means for venture. The collapse of Adobe’s effort to acquire collaboration-software startup Figma for about $20 billion amid pushback from regulators in the U.K. and Europe could be one more sobering influence on venture capital, The Wall Street Journal reports.
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Higher interest rates have already depressed the startup ecosystem at both ends of the spectrum, including private funding of early-stage startups and the ability of late-stage startups to enter the public markets via an initial public offering. The demise of the Figma deal reflects the increasing difficulty that some startups will face as they pursue an acquisition by another company.
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“I think it’s a net negative on venture investing and startup formation. And if the deal had happened, it would have been a net-positive,” said Nathan Lindfors, policy director at Engine, a nonprofit policy group that advocates for startups.
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$1 Billion
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The amount Adobe is required to pay Figma as a termination fee under an agreement between the companies.
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Trevor Milton Gets Four Years in Prison for Deceptions on Zero-Emission Trucks
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A judge sentenced Trevor Milton on Monday to four years in prison for defrauding investors in Nikola, the electric-truck company he founded, WSJ reports. Milton, 41 years old, was convicted on several fraud charges last year. Witnesses testified that he lied to ordinary investors about nearly every aspect of Nikola.
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Milton, speaking through tears during a three-hour hearing in Manhattan, told the judge that his statements about the company referred to its business model. “I did not intend to harm anyone, and I did not commit those crimes,” he said during a rambling 30-minute statement.
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U.S. District Judge Edgardo Ramos, who also ordered Milton to pay a $1 million fine and forfeit a property in Utah, said real people were hurt by his actions.
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Carlyle and Insight Partners Acquire Risk-Management Business Exiger
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Buyout firm Carlyle Group and technology investor Insight Partners have acquired risk-management software and services provider Exiger at a valuation of around $1.2 billion, according to two people familiar with the matter.
The firms beat out high-profile rivals including Blackstone in a competitive auction process, one of the people said. Blackstone didn’t respond immediately to request for comment.
Carlyle and Insight secured a controlling stake in the McLean, Va. company, with existing backer Carrick Capital Partners retaining a minority interest, Washington-based Carlyle said. Exiger founders and managers also participated in the deal, which is subject to closing conditions and regulatory approval.
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Funds
Baird Capital closed its sixth U.S. venture capital fund with $218 million in commitments to continue making mid-stage investments in the business to business technology and services markets. To date, the new fund has invested in three companies.
Motivate Venture Capital, which focuses primarily on business-to-business software and automation for legacy industries, raised $81 million for its second fund. The Chicago-based firm has so far invested in over 20 startups through the new vehicle.
People
Fund administration provider Formidium appointed John Manley to the post of chief marketing officer.
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AllSpice.io, a Somerville, Mass.-based hardware development platform, added $6 million in new funding from investors including Root Ventures and Flybridge Capital Partners.
Excarta, a San Mateo, Calif.-based developer of a generative AI model for the commercial weather forecasting market, was seeded with a $2.5 million investment from Village Global and others.
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The Apple Watch Ultra 2 is one of the watches that falls under the ban. PHOTO: JUSTIN SULLIVAN/GETTY IMAGES
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