📈 Jordi Pujol, CFA 📊

The Information broke news that Insight Partners has just secured $10B in funding for their latest flagship fund. This is perfectly timed given their multiple $1B+ companies sold over the past week. This is a clear sight that #limitedpartners still have in their #privateallocations even during the current slow markets for #IPOs and #M&A. This would also appear to be good news for #AIfinancing and #SaaSFinancing. What do you think? #Management #VentureCapital #PrivateEquity #CapitalMarkets https://lnkd.in/gXu_s8Qj

2

1 Comment

🚨 California Bill AB-3129: A New Era for Health Care Transactions? 🚨 Thanks for the detailed note: Kathryn Edgerton, Deborah Daccord, Karen S. Lovitch The recently introduced California Bill (AB-3129) aims to curb the price increases and lower service quality often linked to such acquisitions. Key Highlights: 🔸 Mandatory Reviews: Private equity groups and hedge funds must notify the AG 90 days before any transaction involving a health care facility or provider group. The AG can extend this period by 45 days, potentially delaying transactions. 🔸 Conditional Approvals: The AG can grant, deny, or impose conditions on transactions if they are likely to have anticompetitive effects or significantly impact access to health care services. 🔸 Prohibitions on Management: The bill restricts physician and psychiatric practices from entering management agreements with private equity or hedge fund-controlled entities. Impact on Digital Health Adoption: The increased scrutiny could slow down the adoption of digital health solutions, as transactions involving tech investments may face delays and additional costs. However, it could also ensure that such innovations prioritize patient care over profit. Cost of Healthcare Provision: While the bill aims to control costs, the additional administrative burden and potential delays might increase operational costs for health care providers, which could be passed on to patients. Consolidation by PE Firms: The bill could deter private equity investments, slowing down the trend of consolidation in the health care sector. This might benefit smaller, independent practices but could also limit access to capital for necessary upgrades and innovations. 🤔 Should Other States Follow? While California's approach aims to protect patients from the negative impacts of unchecked acquisitions, it also introduces significant regulatory overhead. Other states should consider the balance between oversight and operational efficiency, learning from California's experience. This bill is a double-edged sword: aiming to protect patients but risking increased costs and delayed innovation. Other states should watch closely to determine the best path forward. #HealthcareReform #DigitalHealth #PrivateEquity #HealthCareInnovation #CaliforniaLegislation

6

As we approach year-end, here's a helpful guide for General Partners and Limited Partners explaining: - What gets taxed? - What isn't taxed? - Scheduling K-1s - How venture fund earnings are taxed - VC fund write-offs - How Carta can help Check it out below (it's a quick read)!

5

Q3 is out and Q4 is in!  This is a great read about Base10's strategic switch showcasing how Carta is simplifying fund administration for emerging managers, which is especially important now rolling into the year-end busy season. 

9

May is when many private companies finalize mid-year comp plans 💵 Need a reliable 409A valuation? Or has it been over a year since your last? We've got you covered! Scalar's 409A valuations keep you compliant, protect employees from tax penalties, and come with a team that supports you all the way through an audit. https://lnkd.in/gs_CtPNS

9

Grappling with the complexities of equity compensation and stock options? Understanding the nuances is critical. Here are some key insights from a recent client discussion: 1️⃣ Be cautious with equity instead of cash: If you're offered equity instead of cash, be aware of potential mismatched expectations. The founder might view it as significant value, but if the equity doesn’t translate into liquid assets soon, you might not see the immediate benefit. 2️⃣ Restricted Stock: For early-stage companies, restricted stock can be advantageous. If the common stock is valued at pennies, securing a restricted stock grant lets you lock in capital gains early. The 83(b) election is crucial here—it allows you to pay taxes on the stock at its current value rather than when it vests at a higher value. Filing within 30 days can save you significantly on taxes. 3️⃣ Stock Options: When a company's valuation is already high, restricted stock may come with a substantial tax burden upfront. Stock options offer a way to delay taxes, which can be helpful if you can't afford to pay taxes on a high valuation immediately. While gains are often taxed as ordinary income, the flexibility to manage when you exercise can make options an attractive choice. 4️⃣ Tax Mistakes Can Be Costly: Missing the 83(b) election can lead to serious consequences. One individual ignored the 83(b) election, thinking it unnecessary, only to face a massive tax bill when the company's value soared. They ultimately had to forfeit their shares to avoid the tax burden. This underscores the importance of working closely with a tax advisor and ensuring all paperwork is filed correctly and on time. Key Considerations When Accepting Equity: 💡 Can you afford the tax burden? If not, stock options might be the safer choice. 🔮 Do you believe in the company’s future? If you’re confident in the company’s potential, restricted stock with an 83(b) election could maximize your gains. 🤝 Are you ready for a long-term relationship with the founder? Equity compensation often ties you to the company for several years. Make sure you’re comfortable with the team and their direction. Equity compensation is a powerful tool for aligning interests, but it requires careful planning. If you need additional guidance, we're here to help you navigate these decisions with confidence.

14

3 Comments

Pleased to share that Fin Capital’s Fintech CEO Pulse Report is out! Fin Capital surveyed over 50 CEOs and C-suite leaders of private companies from our portfolio and the broader fintech industry during June and July 2024 to get a quick pulse on what’s top of mind for fintech’s leaders. Here are some key takeaways: - Optimism in the Air: More than 60% of CEOs reported being bullish or highly bullish on the fintech industry for the second half of 2024. - Regulatory Changes on the Horizon: CEOs identified Cryptocurrency, Open Banking, and Buy Now Pay Later as the top three sectors likely to see increased regulation by the end of 2024. - Headwinds persist. Despite overall bullishness on fintech, CEOs report a weak IPO environment and flag that macroeconomic volatility, regulation, and high interest rates remain top challenges for their companies. However, with abating inflation, CEO’s believe we could see rate cuts begin in September, which could positively affect asset values and market buoyancy, including the IPO window. For more insights, including comments from Logan Allin, Christian Ostberg, Matthew D. Mann, CFA, and Stephanie Perez, check out the full report here: https://lnkd.in/gK6usfwM

33

2 Comments

Monday Momentum: Strategy #16 for a Successful Exit – Maintaining Financial Controls. Strong financial control is the backbone of a scalable, high-value business. Buyers and investors want to see robust systems, clear profitability, and data-driven decision-making. Here’s how to ensure your financial foundation is solid: Tip 33: Appoint a Finance Director (FD) or CFO Bring on a Finance Director or CFO to oversee your financial operations. This leader ensures profitability, manages financial planning, and provides critical insights as your business grows. A strong financial leader signals stability and readiness to scale. Tip 34: Monitor Key Financial Metrics Regularly track indicators like utilization rates, fee rates, and overhead costs. Keeping a close eye on these metrics helps you make informed decisions to maintain profitability and optimize operations. Example: A professional services firm hired a CFO to manage its financial operations and implemented monthly reviews of key metrics. The CFO identified inefficiencies in overhead spending and adjusted fee rates to improve margins. These changes resulted in stronger profitability, which became a key factor in the firm’s valuation during acquisition talks. The takeaway: With financial control and oversight, you not only scale effectively but also demonstrate operational excellence to potential buyers. When it is time to produce a Quality of Earnings report to a buyer pool you will have everything at your fingertips. Ready to strengthen your financial foundation for a successful exit? #MondayMomentum #ExitStrategy #FinancialControl #Profitability #Leadership #CFO #Entrepreneurship #Club33

9

California Enacts Digital Financial Assets Law - Now there are two! #California #Governor @Gavin Newsom signed into law Assembly #Bill39 ( #AB 39 ), establishing a Digital Financial Assets Law (DFAL) set to go into effect July 1, 2025. Key provisions- apply to businesses engaging in "digital financial asset business activities" for California residents. These activities include: -Exchanging, transferring, or storing digital financial assets, as well as administering digital financial assets directly or through an agreement with a control services vendor. -Holding electronic precious metals or representing interests in precious metals electronically on behalf of others, or issuing shares or certificates representing these interests. -Exchanging digital representations of value used in online games, game platforms, or a family of games for either another digital financial asset from the same publisher or legal tender or bank/credit union credit outside the game environment, also offered by the same publisher. @Kevin Kirby , @Sarah Ashkan , @Igor Voloshin , @Andrew T. Albertson , @Ryan J. Straus #crypto #bitcoin #SVVG

8

2 Comments

Advice from a CFO who’s crushed 4 private equity deals: In our recent Thrive community Q&A, Robert (Bob) Gold shared a simple but critical insight: "The skillsets are just so different... You need to laser focus on inbound and outbound cash and be very adept at liquidity management." Why? Because in private equity, managing cash flow and liquidity is even more important than having experience with exits. Here are the 3 biggest lessons Bob shared for CFOs looking to excel in PE: 1️⃣ Cash Flow is King: It's not just about budgeting—it’s about knowing exactly where every dollar is coming from and going. 2️⃣ Liquidity Drives Decisions: Ensuring your business has the cash it needs to stay agile and invest in growth is non-negotiable. 3️⃣ Working Capital is a Game-Changer: Managing payables, receivables, and inventory effectively can be the difference between success and failure in PE. For aspiring CFOs in private equity, this advice is Gold (pun intended 😅 ). Focus on these fundamentals, and you’ll be set up for success. 💡 Want more insights like this? Join our newsletter for exclusive tips, strategies, and advice from top private equity leaders. Don’t miss out—stay ahead in your career! 👉 https://lnkd.in/eMkPX8kr 

2

2 Comments

Excited to join industry leaders in LA to explore the future of non-traditional investments. I’ll be speaking at the Private Wealth Southern California Forum, hosted by Markets Group, on 12 November. Together, we’ll discuss how innovations in alternative assets are reshaping the investment landscape. Thank you to Markets Group for providing the platform to explore these transformative developments. #PrivateEquity #Innovation #Technology #Entrepreneurship #VentureCapital #Investing #Finance #Alternatives #Startups #Speaker

35

1 Comment

🌱 For founders taking on venture debt, covenants are the fine print you cannot afford to ignore. 📃 They set the boundaries for how you can operate and manage your company’s finances. If you don’t play by these rules, the consequences can be pretty dire. It’s all about negotiating terms that align with your startup’s financial health. Be sure to read the original post by Kruze Consulting to get the full breakdown. Link in the 1st comment. 👇 #StartupFinance

7

1 Comment

Led by Anduril, defense tech funding sets a new record this year | TechCrunch https://buff.ly/4129kts Anduril, a leader in defense technology, has driven defense tech funding to an unprecedented high this year. Investments in this sector have surged, reflecting a growing interest in advanced military solutions and cutting-edge innovations. This milestone underscores the increasing importance of tech-driven defense initiatives in modern security strategies. As global tensions rise, there's a notable shift towards integrating AI, robotics, and autonomous systems into defense operations. The record-breaking funding highlights the critical role technology plays in national and international security landscapes. #DefenseTech #InnovationInSecurity

1

Small business owners and accounting professionals should attend the "Enhancing Your Advisory Role: Best Practices for Securing Business Lending" event to gain valuable insights into the complex world of business financing, which is essential for growth and sustainability. This event will equip attendees with practical strategies for securing loans, helping them better navigate the lending process and understand key factors like creditworthiness, loan options, and risk mitigation. For accounting professionals, it offers an opportunity to expand their advisory services, enabling them to provide more comprehensive financial guidance to clients. Additionally, the event provides a platform for networking with industry experts and peers, fostering connections that can lead to future business opportunities. Don't miss this chance to enhance your financial expertise and improve your ability to secure the funding necessary for business success. https://lnkd.in/ea_xvnJr

4

If you’re a fund CFO, your fund is likely run on tons of spreadsheets. It’s an opaque system that’s error prone and can make for a painful audit season. Carta Fund Administration gives GPs, LPs, fund CFOs, and their fund admin partners unprecedented transparency into fund transactions. What Carta provides: ✅ A 400-person fund administration team, including 150 fund accountants with an average 10+ years of experience servicing some of the largest private funds in the world ✅ A shared source of truth and transparency into every transaction for GPs and fund accountants—no more costly errors resulting from mistyped manual entries ✅ Real-time reporting—most clients can access a draft version of financials on the first day after the quarter closes ✅ A highly-auditable event-based accounting platform—trace any number back to the journal entry, event, and document that created it We purpose-built Carta Fund Administration for private fund CFOs. Find out more: https://lnkd.in/gmza-8gC #FundAdmin #VC #FundAccounting #FundAudit

182

1 Comment

LP Tip #20 out of #50: To re-up or not to re-up A re-up refers to an LP making an additional investment in a fund where they previously invested. Before we dive in I want to share that there are reasons an LP may not to re-up which are not in your control. Here is a short list: ➡️ The LP may have evolved their strategy and needs to scale back the #️⃣ of funds they invested in.   ➡️ The LP was never set up to re-up in the first place. ➡️ The LP could be an individual that found themselves in a cash crunch and overly exposed to venture.  I'm assuming that when you got your investment that the LP explicitly told you they do re-ups. Please do not assume they do. My expectation is also that the LP dug in to properly underwrite the fund. 🏴 Re-ups are not automatic. An LP will have to re-underwrite each fund. The speed of the re-up also depends on how much work was done in the initial investment, who led the investment, level of confidence there existed when that investment was done, and current pipeline of funds. There are 4 flags that may cause an LP to walk away. 1️⃣ Partner Breakups/Changes and Team Turnover:  The biggest risk in Partnerships are whether the Partners will stay together. One LP gave me a framework on how to think through this issue that has stuck with me. Partnership is like a marriage. If one feels there is potential for a breakup, does one believe it will be an amicable breakup? Or, does one believe the spouses will never talk again? If it is an amicable split that is manageable. The Partners can find a way to support the fund. Then the question becomes whether the LP wants to back the Partner/s that remain.  If there is high team turnover. The LP will want to investigate because team stability is used as a proxy for firm sustainability and ability to scale. 2️⃣ Fund Does not Execute on what they Sold the LP:  The LP “bought” something specific and typically it is because they were missing this strategy or wanted exposure to a strategy for the portfolio they were constructing. An institutional LP will invest and write a detailed investment memo flagging all the things you said you were going to do and then go back and compare when you come back to ask for money. If for example you pitched a generalist seed stage fund and you show up asking for money sharing that you invested in deeptech at A that will cause alarm. The same can be said for the number of companies you promised to invest in or check sizes you wrote. If there are big differences LPs will want to know why. 3️⃣ Bad Actions  The fund manager/s does something that is unethical. This is a no go for an LP.  What if the situation is not clearcut? This is different for everyone and requires discussions b/w GP and LP, but most LPs don't want headline risk. 4️⃣ Continuous Underperformance  If it's early days an LP will look at some key indicators to see how you are progressing over time.

17

https://lnkd.in/gZeefZhX Private equity funds gathered $176.7 billion in the first quarter of 2024, a drop of roughly 10 percent from the $195.5 billion recorded in the same period last year, according to preliminary findings from PEI data. Interest rate uncertainty continues to weigh on buyout and exit activity, while record dry powder for the asset class remains stacked for 2024, the data found.

2