How the Venture Fund Market Is Evolving Due to the COVID-19 Pandemic
When it comes to business and finance, the venture capital market is constantly evolving. The rise in SPACs and rolling funds are just a couple of components that contribute to this growth, as well as the COVID-19 pandemic. Kathleen Entwistle, private wealth advisor at Morgan Stanley Private Wealth Management, Jim McCann, chairman at Worth and chairman and founder of 1-800-FLOWERS and Slava Rubin, founder and managing partner at humbition and founder and CEO of Indiegogo recently offered their insight on the changing dynamics in venture funding.
For starters, COVID-19 had a big impact on how we handle money. “In America, in the world, we’re seeing the zero interest rate environment,” Rubin said. “And in the zero interest rate environment, everybody’s trying to figure out where to get yield. And alternatives are definitely one of those options. And when it comes to alternatives, you have private companies being one of those main options. And you’re seeing in parallel to the macro economic situation, you’re seeing actual innovations that are happening in the funding opportunities. So it’s really an exciting time literally today, as it relates to investing into private companies, thinking about how to take them public, thinking about investing early into public companies, thinking about the various innovations.”
Due to the changes caused by the pandemic, SPACs, which stands for special purpose acquisition company, became “the norm,” according to Rubin. He also noted there are four key factors to keep in mind in regards to venture funding. “In short, the four things are SPACs,” Rubin said. “And then the second thing is rolling funds. The third is the direct listings, and fourth is changing the equity crowdfunding rules.”
See the whole conversation about ‘The Changing Dynamics in the Venture Fund Market’ below.