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- ✂️ Rate Cut Impact on Venture 🎙️ Agenda Announced 🎶🎶 We Rollin to AI INFRAAAA
✂️ Rate Cut Impact on Venture 🎙️ Agenda Announced 🎶🎶 We Rollin to AI INFRAAAA
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✂️ Interest Rate Cut & Impact on Venture
Wednesday marked the first rate cut since 2020 after 12 consecutive months of holding steady. The definitive cut of 50 basis points comes amid a deteriorating U.S. labor market and moderating inflation numbers, hinting toward a more aggressive front-loaded approach to their cutting cycle. “We aim to restore price stability without the kind of painful increase in unemployment that has sometimes accompanied disinflation,” Powell said in a post-meeting press conference. In a subsequent press release, the FED signaled that the new rate-cutting cycle could see another 50-point cut by the end of the year and a 100-point cut in 2025. With that, the FED’s median rate estimate dropped from 4.25% to 4.5% by the end of the year, and 3.25% to 3.5% in 2025. This lower rate will have ripple effects in both the short and long term as news about the FED’s rate cut plan becomes clearer.
(Image Source: Reuters)
How Does This Affect a Struggling VC Market?
Rising interest rates since 2022 have played an inverse role in VC funding. Public markets were significantly affected, especially in the late-stage and venture-growth stages leading to IPO. As a result, cash distributions to LPs declined to 5.1% of NAV from 30% in 2021. These persistent liquidity challenges trickled down to the early-stage market, narrowing the scope of investments for VCs. This created an environment in which market uncertainties prompted venture-backed companies to lengthen their cash runways through drastic cost-cutting measures. Supported by record-high valuations maintained post-pandemic, capital remained trapped inside investor portfolios, pushing funds towards secondaries to increase liquidity.
Source: Getty
The recent 50 basis point rate cut by the FED is expected to provide some relief and stimulate market activity. Rate cuts typically lead to a rebound in IPO offerings and help general partners (GPs) return locked-up capital to limited partners (LPs). Lower borrowing costs for businesses should also boost mergers and acquisitions (M&A) activity, which is good news for LPs who haven’t seen significant distributions to paid-in capital (DPI) from 2019-2022 vintage funds. The timing of fundraising for venture funds may shift as potential LPs, now seeing lower returns on traditional investments, as the desire to achieve higher returns becomes more difficult. The bias towards investing with firms that have a track record of returning cash may begin to shift towards newer funds.
Historically, periods of lowered interest rates, such as in the 2010s following the 2008 financial crisis, have seen a surge in VC investments. During this time, hundreds of new VC firms entered the market, and the overall value of venture capital investments increased from $23 billion in 2010 to over $58 billion in 2015. As the opportunity cost for LPs looking to move away from lower-risk investments decreases, GPs will be able to raise new funds, riding on a potential boost to exits. Increased availability of capital for companies will drive valuations and increase investor willingness to take on more risk.
Moving Forward
The recent FED rate cut plan creates a favorable environment for venture capital investments. Increased liquidity, lower cost of capital, and higher valuations all act as a boost to the startup landscape, making it an opportune time to invest in VC funds capable of capturing another period of historical growth.
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🎙️ AGENDA ANNOUNCED 🎙️
We’re just one week away from the AI INFRA Summit, and we’re excited to share the official speaker’s agenda!
Every detail has been crafted with care, and each speaker has been thoughtfully selected with purpose. This event represents months of hard work, driven by years of industry relationships and collaborations with our amazing community partners.
Each session has been designed to spark meaningful conversations around today’s key issues, offering insights to guide us forward. We’ve worked closely with every speaker to ensure their talks not only reflect the current moment but also inspire the path ahead.
Almost at Maximum Capacity - Register Today: https://lu.ma/ai-infra-summit
Bay Area Startups Secured Over $945M
Week 3 ends with just over $945M in fundings, and September-to date stands at $4.14B, on track to match or exceed September 2023's $5.1B. Three megadeals in cleantech (Twelve), AI (World Labs) and fintech (AtoB ) made up almost half of this week's total.
The most publicized funding this year isn't even completed, but OpenAI's pending $6.5B round at a $150B valuation keeps leaking details. The latest is that the round, still being negotiated in late-stage talks, is over-subscribed – by BILLIONS – and that the minimum acceptable investment is $250M. Investors wanting to participate include Microsoft, Nvidia, Apple, Tiger Global and the Abu Dhabi AI investment firm MGX. Stay tuned for final details.
The latest IPO filing came this week from Richmond-based BioAge Labs, a biotech company that develops treatments for metabolic diseases and obesity, filed to go public as early as next week, seeking a valuation as much as $138M. Several other biotech firms have had successful IPOs this year and multiple other non-biotech firms are biding their time, waiting for a stronger IPO market to return.
Early Stage:
Rentberry closed a $90M Series A a closed-loop platform that makes the long-term rental process transparent and efficient and eliminates the hassle of paper applications.
DeltaStream closed a $15M Series A, an innovative stream processing platform harnesses the power of Apache Flink© to simplify and easily process real-time data.
L-Charge closed a $8M Series A, a revolution in EV charging infrastructure. We providing charge as a service for EV fleets, using our utility-independent solution.
Cercle closed a $6M Seed, an AI company that unlocks women’s healthcare data at scale into insights for optimal patient and business outcomes
Push Cash closed a $4M Seed, Push is for operators that want to offer instant account-to-account bank transfers for their users, regardless of their financial institution.
Growth Stage:
Twelve closed a $200M Series C , transforming CO2, water and renewable energy into into essential products through the power of electrochemistry.
AtoB closed a $130M Series C, provides drivers and fleet operators with easy-to-use financial products such as no-fee fleet cards.
Picus Security closed a $45M Series C. transforms security practices by correlating, prioritizing, and validating exposures across siloed findings.
TeamBridge closed a $28M Series B, their composable workforce OS replaces individual workplace tools by organizing and automating onboarding, scheduling, pay and more.
Orb closed a $25M Series B, the modern pricing platform that gives businesses the ability to bill for seats, consumption, and everything in between.
The Most Accurate LLM for AI Agents
TheAgenticAI, developed by ScaleGenAI, is a cutting-edge large language model (LLM) engineered for agentic AI workflows. By utilizing a combination of open-source models and online reinforcement learning, it surpasses leading models such as GPT-4 and Claude 3.5 Sonnet in complex reasoning tasks, delivering unparalleled accuracy.
Key Features
Multi-Step Reasoning: TheAgenticAI excels in multi-step workflows, handling complex tasks requiring multiple stages of reasoning with superior accuracy compared to its competitors.
Long-Context Processing: The model is designed to maintain a strong grasp of long-term contextual information, ensuring coherent task execution.
Function-Calling Capabilities: With advanced function-calling abilities, TheAgenticAI facilitates precise code generation and delivers highly structured outputs.
Performance Comparison
TheAgenticAI outperforms existing models like GPT-4 and Claude 3.5 Sonnet, especially on tasks that require multi-step reasoning and function-calling.
Current Models: GPT-4 and Claude 3.5 achieve approximately 60% - 65% accuracy on multi-step reasoning tasks.
TheAgenticAI: Boasts 77% or higher accuracy, all while requiring no changes to existing API pipelines.
Benchmark Results: T-Eval Test
TheAgenticAI’s performance has been rigorously tested using the T-Eval Benchmark, which assesses the reasoning and tool-calling capabilities of LLMs across complex domains.
Reasoning:
GPT-4: Correctly reasoned the chain of thought in 65% of cases.
TheAgenticAI: Achieved correct reasoning in 77% of cases.
Function-Calling:
GPT-4: Correctly identified the right function in 82% of cases.
TheAgenticAI: Correctly identified the function in 92% of cases.
Function Arguments:
GPT-4: Passed correct arguments in 61% of sequences.
TheAgenticAI: Successfully passed correct arguments in 80% of cases.
Why TheAgenticAI?
While many current LLMs struggle with accuracy on moderate to complex tasks, TheAgenticAI consistently delivers higher performance— without requiring any modifications to existing APIs. It is the ideal solution for businesses relying on complex agentic workflows, providing unmatched accuracy and operational efficiency.
Join the Waitlist Today. Sign up now to secure your spot and experience the next generation of LLM technology. Email: [email protected]
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