Late-Stage Investing

Extracted Attributes

• Advantages

  Demonstrated viability, established revenue streams, clearer financial health, faster timeline to exit (IPOs or acquisitions), opportunity for liquidity.

• Definition

  Investment in mature companies with established market presence, often nearing profitability or preparing for an Initial Public Offering (IPO).

• Disadvantages

  Higher valuation (potentially missing early-stage growth), less influence on strategic decisions, illiquid nature, longer-term perspective than traditional markets, risk from competition.

• Characteristics

  Companies have developed a viable product or service, demonstrated market fit, and are in a scaling and execution phase, often with significant revenues.

• Conceptual Link

  Often discussed in the context of 'late capitalism', a term describing an economy with digital industry dominance, corporate concentration, flexible manufacturing, increasing economic inequality, and rising debt.

• Typical Investment Range

  From $10 million to over $500 million, depending on investor type (e.g., private equity, hedge funds, strategic investors).

• Key Considerations for Investors

  Thorough financial health check, analysis of market positioning, understanding potential exit strategies, alignment with investment goals, critical manager selection.

Timeline

• Werner Sombart first used the term 'late capitalism' (Spätkapitalismus) to describe a new capitalist order emerging after World War I. (Source: Wikipedia)

  1925-XX-XX

• For many Western Marxist scholars, the historical epoch of late capitalism begins with the outbreak of World War II. (Source: Wikipedia)

  1939-XX-XX

• Ernest Mandel published his book 'Late Capitalism', which popularized the term in the English-speaking world (English translation in 1975). (Source: Wikipedia)

  1972-XX-XX

• Many economic and political analyses of late capitalism were published. (Source: Wikipedia)

  1970s-1980s

• Academic analyses of late capitalism shifted focus to culture, sociology, and psychology. (Source: Wikipedia)

  1990s-XX-XX

• The Atlantic highlighted that the term 'late capitalism' was in vogue in America as an ironic term for modern business culture. (Source: Wikipedia)

  2017-XX-XX

• A Wall Street Journal writer complained about universities teaching 'End Times of 'late capitalism'. (Source: Wikipedia)

  2024-XX-XX

• CRV returned $275 million to LPs, citing poor conditions for late-stage investing, exemplifying a rationalization in the Venture Capital Market. (Source: Related Documents)

  Recent

Late capitalism

The concept of late capitalism (in German: Spätkapitalismus, sometimes also translated as "late stage capitalism"), was first used in 1925 by the German social scientist Werner Sombart (1863–1941) to describe the new capitalist order emerging out of World War I. Sombart claimed that it was the beginning of a new stage in the history of capitalism. As a young man, Sombart was a socialist who associated with Marxist intellectuals and the German social-democratic party. Friedrich Engels praised Sombart’s review of the first edition of Marx’s Capital Vol. 3 in 1894, and sent him a letter. As a mature academic who became well known for his own sociological writings, Sombart had a sympathetically critical attitude to the ideas of Karl Marx — seeking to criticize, modify and elaborate Marx's insights, while disavowing Marxist doctrinairism and dogmatism. This prompted a critique from Friedrich Pollock, a founder of the Frankfurt School at the Institute for Social Research. Sombart's clearly written texts and lectures helped to make "capitalism" a household word in Europe, as the name of a socioeconomic system with a specific structure and dynamic, a history, a mentality, a dominant morality and a culture. The use of the term "late capitalism" to describe the nature of the modern epoch existed for four decades in continental Europe, before it began to be used by academics and journalists in the English-speaking world — via English translations of German-language Critical Theory texts, and especially via Ernest Mandel's 1972 book Late Capitalism, published in English in 1975. Mandel's new theory of late capitalism was unrelated to Sombart's theory, and Sombart is not mentioned at all in Mandel's book. For many Western Marxist scholars since that time, the historical epoch of late capitalism starts with the outbreak (or the end) of World War II (1939–1945), and includes the post–World War II economic expansion, the world recession of the 1970s and early 1980s, the era of neoliberalism and globalization, the 2008 financial crisis and the aftermath in a multipolar world society. Particularly in the 1970s and 1980s, many economic and political analyses of late capitalism were published. From the 1990s onward, the academic analyses focused more on the culture, sociology and psychology of late capitalism. According to Google Books Ngram Viewer, the frequency of mentions per year of the term "late capitalism" in publications has steadily increased since the 1960s. Sociologist David Inglis states that “Various species of non-Marxist theorizing have borrowed or appropriated the general notion of historical ‘lateness’ from the original Marxist conception of ‘late capitalism’, and they have applied it to what they take to be the current form of ‘modernity’.” This leads to the idea of late modernity as a new phase in modern society. In recent years, there is also a revival of the concept of "late capitalism" in popular culture, but with a meaning that is different from previous generations. In 2017, an article in The Atlantic highlighted that the term "late capitalism" was again in vogue in America as an ironic term for modern business culture. In 2024, a Wall Street Journal writer complained that “Our universities teach that we are living in the End Times of ‘late capitalism.’” Chine McDonald, the director of the British media-massaging thinktank Theos argues that the reason why so many people these days are preoccupied with the “end times”, is because “doom sells”: it caters to deep psychological needs that sell a lot of books, movies and TV series with apocalyptic themes. In contemporary academic or journalistic usage, "late stage capitalism" often refers to a new mix of (1) the strong growth of the digital and electronics industries and their influence in society, (2) the economic concentration of corporations and banks, which control gigantic assets and market shares internationally (3) the transition of Fordist mass production in huge assembly-line factories towards Post-Fordist automated production and networks of smaller, more flexible manufacturing units supplying specialized markets, (4) increasing economic inequality of income, wealth and consumption, and (5) increasing indebtedness of the population.

Web Search Results

• Risk and Reward: Early- and Late-Stage Investing

  # Late-stage Investing ### Pros: Late-stage investing may come with the advantage of dealing with startups that have demonstrated some form of viability and market acceptance. These companies typically have established revenue streams and can offer a clearer picture of their financial health. Late-stage investors may also experience a faster timeline to an exit through IPOs or acquisitions, providing an opportunity for liquidity compared to their early-stage counterparts. ### Cons: [...] ### Considerations: To help make informed decisions in the late-stage investment landscape, investors may want to conduct a thorough financial health check. Analyzing financial statements and market positioning can be important to assess the late-stage startup’s stability. Understanding potential exit strategies, such as IPOs or acquisitions, can be crucial for late-stage investors. Moreover, late-stage investors should ensure that the startup aligns with their investment goals. [...] However, late-stage startups are generally valued higher, meaning investors might miss out on the early-stage valuation opportunity. Late-stage investors may also have less influence on the company’s strategic decisions and operations, compared to their active involvement in early-stage ventures. Late-stage investments are still illiquid in nature and may hold a longer term perspective than traditional markets. There’s also the risk of missing out on the growth potential that could occur in the

• Investment Essentials: Late-Stage Venture Capital

  Late-stage venture capital includes investments that occur once a company has developed a viable product or service, demonstrated market fit and are in a scaling and execution phase. Considering that late-stage venture companies tend to be larger and more mature compared to early-stage, investments in these strategies tend to be more concentrated and returns can be more tightly tied to exit activity. [...] Venture capital strategies have faced recent headwinds, including a sluggish exit environment. In addition, late-stage strategies have been increasingly linked to mega-deals, due to record investments in artificial intelligence (AI). [...] Large deals drive the most exit value and rely on a cooperative IPO market. However, the race for AI technology and talent has also led to large acquisition exits and other non-traditional deals where established technology companies aim for a partnership approach. AI exits will be a key for late-stage strategies given that companies can stay private for longer without compromising valuation. From an investor standpoint, manager selection remains critical due to the concentration of top-tier

• VC Insight: Understanding Late-Stage Investment Risks

  Discovering the perfect match is crucial. When catering to late-stage investors, it becomes vital to weigh asset classes, age-based risk, and various other factors before committing to an investment. Interestingly, a significant number of investors in the public market are currently seeking opportunities in pre-IPO companies to solidify their market foothold. Simultaneously, these investors seek liquidity as late-stage companies gear up for their public debut or an acquisition. [...] Businesses that are only six months to a year away from an exit, such as an IPO, are known as late-stage companies. Not only have these organizations proven their concept, but they’ve achieved significant revenues when stacked up against the competition. Here are a handful of late-stage company characteristics: ### High Return With Moderate Risk [...] Competition is an aspect of business that not even late-stage companies can escape. That said, late-stage investors must endure the risk of other companies skyrocketing to the top regarding revenue and customer acquisition. In a worst-case scenario, an investor could lose a massive chunk or all of their investment. #### Operating Cycles

• 7 Types of Late-Stage Investors to Know

  Like hedge fund investors, private equity fund investors typically aim at sponsoring later-stage rounds, from $10 million to $500 million. However, some Series A and B rounds have enjoyed their company in the past. In fact, private equity firms are the most active investors for unicorns and other companies undergoing later stage. [...] Hedge fund investors tend to focus on late-stage companies launching rounds around $500 million or more. We’ve seen a handful of hedge funds become involved in Series A rounds, but they usually dive into the game later, investing about $10 million to $500 million. [...] Strategic investors might come into the picture during early rounds, but keep this ace up your sleeve for later-stage rounds. They typically invest tens of millions to more than a billion dollars. Valuation isn’t a deal-breaker, and like private equity funds, strategic investors have a valuable network that could benefit your company drastically. These investors are the caffeine in your professional network, introducing core ties and wisdom you never knew you needed (but now can’t live

• Types of late-stage investors - High Growth Handbook - Elad Gil

  Valuations for investment: Mainly later-stage rounds in the $500M-plus range, although some private equity funds have done series A or series B rounds. Benefits: May have broad or differentiated networks. May be able to provide introductions to other late-stage portfolio companies if doing enterprise sales. [...] Benefits: Less valuation sensitive. May help you enter China or other markets or simply be a source of capital. Tencent, Alibaba, Rakuten, and others have invested aggressively in tech startups over time. Drawbacks: May try to tie investment to joint venture or other structures in their home market. May be trying to learn from your company so they can launch competitor in their own market. [...] Benefits: May be hands-off investors. Depending on investor subtype, may bring different network to the table. Drawbacks: May be less operationally inclined, even though emphasis is later stage. May be very numbers driven, so will spend a lot of time focused on financials, long term moats, and the like.