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Lowenstein Sandler LLP

Law firm Lowenstein Sandler recently hosted dozens of venture capitalists and limited partners in San Francisco to discuss some of the latest trends in their business. Axios sat in on a discussion about "unicorns"—startups valued at more than $1 billion—and late-stage investing. Highlights:

  • Uber will be fine.
  • Liquidity needs are growing, which means that secondaries are becoming more common.
  • VC rounds are taking longer to complete, in part due to increased competition within niches.

Near-term Uber: Despite several people in the room admitting they've stopped using Uber, no one seemed to doubt that the company's business is continuing to move along. As for the fate of its next financing, opinions were mildly optimistic. Battery Ventures VP Jeffrey Lu said it will likely raise a down round, though it wouldn't be a big deal, he added. NextWorld Capital principal Tarun Kalra predicted a structured round at a flat valuation, which is currently about $70 billion.

Staying private longer: Overall, this is happening because companies aren't ready to be public, investors said. Some may not be performing well enough, posited Sapphire Ventures principal Kevin Diestel. Other companies raised funding earlier than they should have and are now taking longer to grow to the point at which they could be public, added Benchmark partner Sarah Tavel.

Liquidity: One consequence of unicorns staying private is the growing need for liquidity. Sapphire's Diestel said he's seeing a secondary as part of almost every deal these days, while Tavel says there's an uptick in private tender offers. 137 Ventures partner Elizabeth Weil said that companies aren't fighting the secondaries' discounts because deep down, they know those are the rational prices for their shares. She also added that laws around tenders sorely need to evolve to be more in line with employee needs (Weil went through the process years ago as a Twitter employee).

Slower investment pace: VCs are taking more time to invest because several companies with a similar idea are cropping up, making it more difficult to pick the potential winner, according to Benchmark's Tavel. Investors also have big funds, making it easier to wait and write a bigger check if needed to invest in a hot company, added Accel partner Brian O'Malley. "You don't get fired for lighting $10 million on fire—you get fired for putting $5 million in the eventual No. 2 company," said First Round Capital partner Phin Barnes.

Bridges and extensions: Startups are raising more seed round extensions (extra funding prior to raising a Series A) lately, said Floodgate partner Iris Choi. There's also an overall uptick in bridge rounds, said Lowenstein's Ed Zimmerman, who chairs the law firm's tech group.

Go deeper

Rep. Rice demands Cuomo resign after third woman accuses him of misconduct

New York Gov. Andrew Cuomo during a February news conference in New York City. Photo: Seth Wenig/POOL/AFP via Getty Images

Rep. Kathleen Rice (D-N.Y.) on Monday evening called for New York Gov. Andrew Cuomo (D) to resign, after a third woman accused him of inappropriate behavior.

Driving the news: Anna Ruch told the New York Times Monday that Cuomo asked to kiss her at a New York City wedding reception in September 2019.

Scoop: Inside the GOP's plan to retake the House

House Minority Leader Kevin McCarthy. Photo: Elijah Nouvelage/Bloomberg via Getty Images

House Republicans will reclaim their majority in 2022 by offering candidates who are women, minorities or veterans, a memo obtained by Axios says.

Why it matters: The document, drafted by a super PAC blessed by House Minority Leader Kevin McCarthy, names top Democrats to target — Jared Golden of Maine, Matt Cartwright of Pennsylvania and Ron Kind of Wisconsin — and the type of Republican candidates to beat them.

46 mins ago - Politics & Policy

Scoop: Trump talked out of early Ohio endorsement

Jane Timken at a 2017 Trump rally. Photo: Kyle Mazza/NurPhoto via Getty Images

Donald Trump had to be talked out of making an early endorsement in Ohio's 2022 U.S. Senate race, a sign of his eagerness to reengage politically, people familiar with the conversations tell Axios.

What we're hearing: The former president discussed endorsing former state GOP chair Jane Timken last week during a meeting at Mar-a-Lago with RNC Chairwoman Ronna McDaniel, but top advisers — including Donald Trump Jr. — urged him to wait.