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Understanding Venture Capital in 2021

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Exploring the ins and outs of venture capital in 2021.

A group of people in a conference room discussing venture capital.

Until last year, venture capital (VC) had been riding high. With interest rates close to zero and little yield to be found elsewhere, many investors poured money into VC funds, hoping to cash in on the next big tech trend. However, the pandemic and its associated economic disruption put a damper on VC activity, as many firms pulled back on investing and put their plans on hold.

Kinship Ventures is raising $75 million for its debut fund, Axios has learned. What to know: Kinship is led by Gwyneth Paltrow, former Goop CEO Lisa Gersh, and former Microsoft executive Michele Burns. The fund will focus on early-stage investments in consumer tech, health, and wellness. Kinship is one of the many new VC firms looking to capitalize on the current investment climate and make a name for itself.

There are different ways to ascend venture capital's top ranks. Move fast, be loud and raise a lot of money. Or, build slowly, stay quiet, and focus on delivering consistent returns. Alan Jones, founder of M8 Ventures, is doing the latter. He is raising $10 million for his early-stage fund, but with returns possibly a decade away, he has also taken on a more traditional role. Jones is out to prove that there is a different way to succeed in venture capital.

President Biden is tying startup funding to his national and social policy priorities. That's probably an improvement over Silicon Valley values, which have favored certain companies and founders. Biden's plan seeks to level the playing field and give more access to underrepresented founders. It also provides a direct line of funding from the government that could help startups in need accelerate their progress.

In 1957, a group of scientists fed up with their boss set the modern venture capital model in motion. Today, the story of the unconventional venture firm Draper, Gaither & Anderson is a fascinating look into the early days of venture capital. The firm's success shows that the venture model is here to stay, but also that it is constantly evolving and adapting to meet the needs of the market.

Atlanta venture capital firm TTV Capital has closed its largest fund to date at $250 million. TTV Capital is a leading investor in the Southeast, with a focus on consumer, enterprise, and healthcare technology. The firm has made some big bets in the past year, including investments in companies such as Instacart, Notarize, and PillPack.

The popular crypto podcast Off the Chain is branching out beyond its media roots to invest in emerging Web3 startups. Hosts Anthony Pompliano and Nic Carter recently announced the launch of their new venture capital fund, Off the Chain Capital. The fund will focus on investments in early-stage companies building the blockchain infrastructure of the future.

Nearly a year ago, venture capital firms were cautioning founders of the coming lean times in the private markets, as high-flying valuations came back to Earth. Now, that caution has largely been replaced by optimism as investors look for the next big thing. With more money available than ever before, VC firms are once again actively investing in startups and entrepreneurs.

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