Welcome to The Ivey Venture Capital Club!

Welcome back everyone 🙂! This is our first iteration of the IVCC newsletter for the 2025 school year — expect to see these in your inbox every month. Here’s what you can expect to see within these editions:

• Recent updates, recaps and upcoming events for IVCC

• Market Updates & The Inside Scoop on Venture Capital

• Recruiting Advice

For those who are new here, the Ivey Venture Capital Club is the premier hub for venture capital education at Western University and the Ivey Business School. Since our incorporation in 2022, our mantra has been to “make venture capital education as accessible as possible.” As always, this year we’re dedicated to bringing you all the best learning and career opportunities out there.

IVCC’s October Event Recap

Our (3rd) Annual Firm Trip!

IVCC’s 2024 Toronto Firm Trip marked our third annual visit to some of the most notorious venture capital firms in Toronto. This year’s destinations included our friends over at Portage Ventures ($3B), Inovia Capital ($3B), and Framework Venture Partners ($300M).

Members had the opportunity to network with managing partners and recruiters at each firm, participate in a venture case competition at Inovia, and connect to exclusive recruiting opportunities at Canada’s largest venture capital firms. We also had a restaurant social at Local Adelaide, tours around the Bay Street offices, and a look into downtown Toronto’s venture work culture.

Our VC Educational: Recruiting 101

At IVCC, we’re always committed to bringing you quality career opportunities throughout the year. Last semester, we hosted our Recruiting 101 Educational at Ivey to teach our members how to break into and navigate the field of venture capital recruiting.

Venture capital internships can fit in both the early and later stages of your career. As a university student, VC positions are likely among the first jobs to fit into your internship and recruiting journey. 

However, recruiting for a full-time venture capital job, as opposed to internships, differs drastically. Analysts typically gain experience in investment banking, consulting, or private equity prior to transitioning to VC roles. 

There are also many other ways of breaking into the industry. Many of the best venture capitalists in the world have come from being journalists, founders, equity researchers, and writers. Some have even started in venture as a new graduate.

As long as you’re curious, passionate, driven, and able to provide the firm immense value from the get-go, you’re in a great spot. 

A Recap of the Venture Recruiting Process

Being a venture capital analyst demands a mix of both qualitative and quantitative analytical skills:

Here are also some of the most commonly asked questions that recruiters might ask:

• Tell me about yourself!

• Why do you want to work for our firm? 

• Pitch an industry to me – why is it interesting to you? 

• Pitch a startup to me – why would you invest in it? 

• What’s a portfolio company of ours that you are bullish/bearish on? 

• How would you value a startup? 

• What are the unit economics of a fintech payments startup?

For a detailed workshop on how to successfully apply to VC firms, send great cold emails, and network with industry professionals, make sure to join us at our future IVCC Educationals!

2024’s Venture Capital Landscape

The third quarter of 2024 saw $66.5 billion in global venture funding, a 16% decline from the previous quarter. At this same time last year in 2023, $78 Billion was invested into the venture market, marking a 15% drop year-over-year (YOY).

The consistent decline can largely be attributed to our cooling economy in the past twelve months, as the Federal Reserve hiked interest rates amidst record high inflation. A subsequently higher required rate of return dampened enthusiasm for high-risk VC investing, culminating in a weak capital raising environment.

Consequently, the last year saw an increase in failed venture-backed companies, further spurring a negative sentiment towards VC among investors.

As a specific example of the above, take ByteLearn — a Series A startup who developed an AI Assistant for mathematics education and tutoring support. In 2021, they raised $9.5 Million seed funding from 100 Unicorns, Leo Capital, and Chiratae Ventures. However, in late 2023, the company only managed to raise $150,000 with no further funding in sight.

Across all funding stages, cases similar to ByteLearn were prevalent over the last few years. The ZIRP (zero interest rate period) era of venture investing is no-longer, as companies are being forced to become more capital efficient and have a stronger path to profitability.

Why VC Was In Hot Water: The IPO Market

The IPO market has an outsized impact on the Venture Capital market. Startups are generally characterized by negative cash flow, requiring additional rounds of funding to continue growth and support expenditure. Without sufficient equity financing, early stage companies face bankruptcy.

The suffering IPO market signifies difficulty in capital raising across the market, which inevitably applies to earlier stage VC companies harbouring more risk. We’ve seen this happen in the last few years, a result of the higher interest rates during 2022-2023 (4.25% to 5.50%).

Given that IPOs are the one of the most lucrative exit options for VC Investors, with weak IPO opportunities, valuations and expectations for VC become dim, leading to more conservative investing strategies. Furthermore, firms face concerns of liquidity as their exit options become more limited, tying up capital during a time where the industry has become used to high spend and increased wages.

As a result, long-term profitability and sustainability become more valued among VC investors who lack confidence in relying on IPO exits. Unicorn startups that thrive on a collective “future vision” may struggle without the prospect of a promising IPO or upcoming funding rounds in the recent future.

Artificial Intelligence in the Long Run: Should We Fear a Bubble?

Expectedly, the global AI market has continued to boom. 33% of IPOs in 2023 were AI stocks, and entrepreneurs are rising around the world to develop AI-powered solutions.

Using his company’s data, CEO of Stripe Patrick Collison found that AI native businesses are being built in large numbers while “growing meaningfully faster than the fastest-growing SaaS antecedents.”

However, many critics paint today’s market as reminiscent of the Dotcom bubble in 2000. Some speculate a crash, the current market foreshadowing a repeat of history. From companies using “AI” buzzwords in borderline unrelated products to potentially low-return and unjustified investments, the similarities are prevalent.

The Dotcom burst was fundamentally influenced by the significant rise to popularity of internet businesses, followed by excessive capital investment that ended with disappointing returns and failed startups.

Alarmingly, just last year, FAANG companies reported disappointing ROI for their AI projects. Goldman Sachs says that despite the impressive investment figures and R&D commitments, “AI might not perform well enough to justify its exorbitant cost.” 

Dotcom Bubble - What Were The Causes?

The monetization of some digital AI services proves to be a concern. Numerous Artificial Intelligence applications serve only to improve existing solutions. Boosting automation and convenience may slightly improve customer experience, but fail to drive significant sales growth. Yet, AI systems could require expensive infrastructure, databases, and data security solutions just to maintain and improve.

It’s worth noting that there have been many successful AI startups that serve prevalent market gaps in areas such as logistics management or data security. However, even the most niche sectors are riddled with competitors of similar size and advantage, which begs the question — is there always enough room for sharing?

In the case of a potential burst of the bubble, the VC landscape could be the first to decline given the equity-reliant nature of early-stage business that typically exhibit negative cash flows. Unprofitable startups would be among the first to fail, just like they did during the Dotcom crisis. Since an event of this magnitude has yet to occur, we can assume an uptrend for the time being.

However, markets can act and change quickly. During the 2000s, the failure of startups and the overall stock market decline occurred closely together, with an impact being seen industry wide even on the largest of tech firms.

Examining early-stage startup failures as a leading indicator may not be extremely useful due to the quick chain reaction markets experience. It would likely be better used in consideration for a stop-loss amidst a downtrend. Multiple industry wide startup failures could be an event with sufficient influence on collective market sentiment.

Regardless, investors should simply continue to focus on fully understanding their target business, assessing its competitive advantages and profitability.

Venture Capital Spotlight - Concentric AI & Other Deals

IVCC’s Deal of the Month: Guesty ($130M)

IVCC’s First Deal of the Month spotlighted Guesty’s $130M Series F funding round. Guesty is a leading property management company with 20+ B2B SaaS (Software as a Service) solutions for Short-Term Rentals. The Y Combinator graduate shifted from a basic service assisting with property listing operations to a full STR management platform.

STRs (Short-Term Rentals) are properties rented for brief periods of time. Property managers in STR often find difficulties in managing online platforms such as Airbnb. Offering an innovative solution, Guesty provides efficient and automated property management, thereby targeting one of the strongest pain points of the STR business.

During our Deal of the Month meeting, the IVCC Educational Team presented an in-depth analysis of Guesty and its potential to IPO.

Despite challenges in the overall market, other startups continued to find success. The ability to garner investor confidence despite a tough capital raising climate is perhaps a signal of intrinsic potential and exceptional growth.

Concentric AI Grabs $45M in Series B

CEO of Concentric AI Karthik Krishnan’s comment summarizes the fundamental problem statement of his company. Concentric AI specializes in Data Security Posture Management (DSPM) and data security solutions powered by artificial intelligence.

Amidst the evolving world of technology, information systems, and the internet, both consumers and firms are facing new challenges with respect to cybersecurity, privacy, theft, and corporate espionage.

Concentric tackles this issue through the innovative approach of a “Semantic Intelligence” product, combining deep learning and NLP (Natural Language Processing) to automatically protect data with ease.

The company’s customer journey can be summarized as simple and efficient, boasting “easy deployment” that avoids disruption to operations.

An enterprise would first provide access to their databases, from which Concentric’s Artificial Intelligence would identify vulnerabilities and sensitive information such as passwords and private files. Concentric would generate recommendations to secure data and trace how it’s being used or where it came from. Finally, the product would ensure that Data Security measures are implemented consistently and efficiently throughout the client’s organization.

Across industries worldwide, organizations like healthcare companies, hedge funds and universities lack manpower. Concentric offers a simpler and more affordable solution to a security problem that enterprises will need to address.

The company’s potential clients include Fortune 500 companies looking to fortify their cybersecurity systems and traditional firms lacking technological readiness: “whales” that would serve as long-term sources of stable recurring revenue.

Concentric’s success thus far is undoubtedly impressive. The company tripled their customer count while boosting revenue by 200% in just one year (2022-2023). Meanwhile, they’ve consistently improved their top-level management, with former Zendesk SVP and Netlify COO Marcus Bragg joining the board of directors in early 2024.

Landing a $45M Series B deal is a strong signal of early investor confidence in the potential growth of Concentric. Their competitive advantage and foundational client base forecasts a convincing expansion into the $20.61+ Billion Total Addressable Market of Big Data Security (2023). In addition to capturing market share, Concentric is bound to benefit from the industry’s impressive CAGR (Compound Annual Growth Rate) of 17.1% (Fortune Business Insights).

According to Matillion, data professionals stated that their company data volumes are growing by 63% monthly. Given AI’s reliance on secure quality data, DSPM won’t be losing its significance as the world enters a new age of technological applications.

However, multiple other startups including Varonis, BigID, and Securiti serve as strong competitors in the DSPM space. For instance, Varonis includes many similar product features in data detection/response, access intelligence, and threat detections.

With high profile clients such as NASA, NASDAQ, Coca Cola, and Toyota already signed to other firms, it is without question that Concentric is not alone nor dominant in the industry.

Concentric’s future growth hinges on its product development and sales. Fortunately, the startup seems to be aligning with this objective, using its recently gained capital to fund a partner program, boost their product portfolio, and grow their team to over 125 employees by this year.

Join Us in Our Deal of the Month Events

When interviewing or applying to venture capital internships, strong analytical skills are a huge asset!

If you’re interested in learning more about Venture Capital and gain professional insight into deals, we’d like to invite you to join us in our future Deal of the Month meetings. Stay tuned to the IVCC Instagram for more.

Written by Kyan Chiang