Venture Capital... let's demystify it!

Meet our new leadership team, get involved & Maker Mondays are back 🥳

Hey y'all!

We have a ton of new and exciting content planned for summer and the upcoming academic year, and we can't wait to dive into the world of startups, VC, crypto, technology, and innovation with you all.

If you have any suggestions on what we should cover or general feedback, let us know at team@v1michigan.com. But for now, let's go! 🚀


Updates:

  • While apps for Product Studio have closed for the summer, stay tuned for Demo Day in mid-August and when apps reopen in the fall.

  • We're so excited to be partnering with Blockchain at Michigan (BAM) to cover all about Cryptocurrency in the Fall 2021 semester! But meanwhile, we'll be delving into Venture Capital during the summer as part of our Demystifying Venture series :)


Maker Monday is Back… on Wednesday!  

Discussion on the future of Robinhood 👀

This week, our Maker Monday will focus on the future of Robinhood and brokerages. We will be going in depth about the 65% crypto sell off, the future of IPO’s and more. Come learn and discuss the future of fintech!

Crypto, GME, investing, WallStreetBets, we'll be covering it all. Pull through to talk about the future, what Robinhood should do next, and what it did wrong.

9 pm EST Wednesday June 2nd


🎉 Meet our new leadership!


VC is on a roll. Yes, despite the pandemic.

If you have launched a startup, planning on launching one, or simply have an idea, you may have thought about how you're going to fund that company and where the money will come from. Apart from seeking angel investors, reaching out to friends and family, and crowdfunding, one popular way for growing and financing your business is through venture capital.

So what exactly is it? Simply put, venture capital is a type of investing done by wealthy individuals or organizations (i.e. pension funds, endowments, insurance companies) in a startup in exchange for equity in the company. Through this form of financing, investors take on high risks in expectation of high return, while also getting to work with the company in its early stages.

Typically it is the venture funds who act as intermediaries between the investors and the startups needing the capital. The investors pool in their contributions to the fund (eg. Andreessen Horowitz, Sequoia Capital, Founders Fund), which in turn give the money to the startups for partial ownership. Often, the contributions are not solely monetary. VC funds also offer subject-area expertise and providing valuable feedback and resources to the startup they are funding.

You might assume that the VC world has been terribly affected by the onset of COVID-19, but the industry has been relatively resilient and VC investors are optimistic about their investments and expect to get higher returns compared to major market equity indexes. Paul Gompers, a professor at Harvard Business School notes, "The bulk of VC investors are looking to do new deals. They’re just sitting on a ton of money."

While the pandemic has made the due diligence process longer and the terms less favorable, researchers say that venture funding in 2020 has outperformed that of previous periods of economic distress and startups closed the year off in a better position than before (4% year-over-year growth; see graphic below). This is in part thanks to the tech boom, digital transformation and the shift towards online services, and consequently cloud technology.

Check out this cool graphic demonstrating the growth of VC by dollar volume over the past decade.

We hope this gives you an overall understanding of what VC is. In the next part, we’ll go over the types of venture capital on our journey to demystifying venture!


Top Tweets of the Week 🐥

A great thread that analyses effective landing pages to help you design your own, whether you’re looking to sell software, socks, or newsletter subscriptions.

Amidst all the discussion on Tech Twitter about Apple, this thread is a refreshing reminder that they do more than just hire (and fire) employees.

Distribution is underrated.


Opportunities 🔍

New V1 content core team opportunity!

  • V1 Content Core Team Member: Are you interested in the tech entrepreneurial world? Interested in helping research, source, and write newsletters? Want to learn more or get more experience in student-led platforms/communities? Join the V1 Core Team!! 🤩

    We are looking for 1-2 new recruits to help write our newsletter, design graphics, and work on our cool side projects including our new V1 Podcast Vault and member spotlights from our V1 Product Studio. The time requirement would be about 2 hours per week :)

    Reach out to us at team@v1michigan.com if this sounds exciting to you!


What We're Reading 🧠

VC not only survived, but thrived

Disrupting Banks: Re-bundling and Rise of Finance Super-Apps

Biden's IRS Plan Would Double Agency Staffing, Target Cryptocurrency


That’s all for today’s newsletter but if you have any specific requests of what you’d like to see in future editions, any ideas for the V1 Community, want to contribute to the newsletter, or any thoughts at all please reach out to us via email or DM us on Twitter!

And if you’ve read all this and still aren’t in the Discord community, what’s holding you back? Join here!