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Economic uncertainty, market volatility, rising interest rates, inflation and the ongoing Ukraine-Russia conflict affected the M&A market the third quarter of 2022 to the point that deal volumes declined across the globe. Most experts agree that a recession is here or likely imminent, and even if one is not, it still is a scenario that companies must prepare for.

That said, while private equity deal activity declined only by a bit in Q3, when compared to the years prior to COVID, it actually increased slightly. As for Q4, there was already chatter, particularly in the lower U.S. mid-market, that deal volumes might increase due to the rush to close deals before the year ended.

As private equity firms continue to pursue deals, they should look to their due diligence firms and operators to ensure extra steps are taken to accurately assess and vet potential acquisition targets given the economic climate and the possibility of a recession.

Due diligence providers will need to go beyond their standard reporting checklists and expand their assessments of three key areas:

Cash flows;
Strength of the customer base and third-party vendors;
Accounting and financial reporting software.

If the COVID-19 pandemic spurred a focus on reallocations and prompted a closer look at EBITDA and gross profits, a recession will call for a deeper focus on cash flows and the potential for surviving ongoing market swings.

Cash flow analysis

It has become important for any due diligence provider to stress test a company’s ability to sustain losses and maintain sustainable liquidity and cash.

While conducting a cash flow analysis is not standard practice for due diligence providers, it should be now. Analyzing a company’s cash flows will help providers determine whether it is ready for a deal ahead of a recession. During a recession, a capital-intensive company would inevitably see its cash flows being strained to pay its debt load, and it’s likely to need more cash to carry out operations. The company would likely be in a negative cash position. Whether it be due to inherited debt or lease commitments, a cash flow analysis can help PE firms anticipate and prepare for such possibilities.

A cash flow analysis should begin by evaluating sales by discounts, returns and allowances, all related to cash, and evaluate for seasonality. It should then do the reverse for vendors and suppliers when evaluating purchases and operational expense transactions.

3 ways PE firms can ensure relevant due diligence for M&A targets ahead of a recession by Ram Iyer originally published on TechCrunch

Nvidia announced some new features for its cloud gaming service during its virtual CES press conference. The company is upgrading its premium plan by adding new servers with better hardware components. Users on the $19.99 plan should expect better performance for more demanding games.

The company is now using GeForce RTX 4080-class graphics processing units on its high-end servers. Before today, users paying for the most expensive subscription plan could access servers with server-grade GPUs that are equivalent to GeForce RTX 3080 GPUs.

As a reminder, GeForce Now lets you play your own games from the cloud. The game is running in a data center near you and the video feed is then relayed to your device. GeForce Now supports Windows, macOS, Android (as well as Android TV) and some web browsers (including Safari on the iPhone and iPad).

GeForce Now customers still have to buy games on Steam, the Epic Games Store and other digital stores — they own the games even if they stop subscribing to the service. But the biggest issue with the service is that some game publishers refuse to let Nvidia support their games on GeForce Now. There are currently 1,500 supported games, including Fortnite, League of Legends, Cyberpunk 2077 and many Ubisoft games. But you can’t play Overwatch 2 or Elden Ring for instance.

Customers can try out GeForce Now for free. There is a queue system and you are limited to 60-minute gaming sessions. If you want to use the service on a daily basis, a ‘Priority’ membership lets you launch a game right away and play for up to six hours at a time for $9.99 per month. You are limited to a 1080p resolution and 60 frames per second.

Last year, Nvidia added a premium tier called GeForce Now RTX 3080 for $19.99 per month. Because of today’s update, this tier is getting a new name. The company is now calling it GeForce Now Ultimate.

In addition to access to more powerful servers, GeForce Now Ultimate supports 4K resolution. If you have a gaming monitor, the Ultimate membership now also supports 240Hz (up from 120Hz). Users can also enable Nvidia’s proprietary features, such as DLSS 3 and Nvidia Reflex.

If you have an Nvidia G-Sync monitor, GeForce Now will adapt the streaming rate depending on how many frames per second you get in your Nvidia Reflex-compatible game. That’s neat! But if you have an Nvidia G-Sync monitor, you likely also have a gaming PC so you may not need GeForce Now.

Existing GeForce Now RTX 3080 members are going to be automatically upgraded to the GeForce Now Ultimate plan in late January. GeForce Now Ultimate will still cost $19.99 per month.

Nvidia upgrades GeForce Now with RTX 4080 performance for premium users by Romain Dillet originally published on TechCrunch

In fundraising, a founder’s greatest challenge is not selling any particular product or strategy. Instead, it is often unwinding and re-aligning the investor’s biases.

The competition is not your market competitor or incumbent. More often, it is the investor’s set of operating heuristics, many of which are quickly influenced by market conditions.

Fundraising in healthcare, especially in a macro environment like the one we’re in, is an opportunity to differentiate and take control of the narrative. When markets start to dip, most companies hunker down and focus on surviving. In moments like these, healthtech companies can take advantage of the status quo gettting upset and rise to the top of a crowded field, signaling to the market why they are the horse to bet on.

Reframe the macro view

When the market seems to be trending downward, it’s an opportunity for founders to take control of the narrative and re-frame how investors view market conditions based on a deep analysis of their sector.

Broadly compared to other industries, healthcare often remains resilient during times of economic distress. When everything is going well, it’s easy to forget and even easier to underappreciate the acyclicality of the healthcare market as a whole. But a quick look at data from the Bureau of Labor shows that employment in the sector continued to grow during the last recession, a testament to how robust the sector is.

While employment may not be a comprehensive barometer for all healthcare activity, the demand for real solutions to real pain points in healthcare will continue to be inelastic. If you’re in services, frame your business around this labor demand; if you’re developing solutions for software, operations and RCM, leverage this growing gap between the need and the adoption of technology.

In this environment, funds will be looking for acyclical markets to invest in. This is an opportunity for you to capture this capital pool.

Get granular

In a market inundated with “digital health” startups and “infrastructure solutions,” it’s vital to differentiate yourself.

Move beyond generic labels that no longer tickle the interest of healthcare investors, and instead map out the progression of your company in three acts, from seed to IPO, even if you’re already a late-stage company:

5 tips for healthcare startups fundraising in a down market by Ram Iyer originally published on TechCrunch

Last week, Solana (SOL) fell to its lowest level since February 2021. But its price has risen over 12% in the past 24 hours on Tuesday after almost nine days of consecutive losses that brought its price to around $8 on Friday.

Amid Solana’s movement, the two largest cryptocurrencies by market cap, bitcoin and ether, both shifted less than 1% in the past 24 hours, showing some stability.

Solana has been volatile for a number of reasons in recent weeks, including one of its most prominent backers being the now-disgraced former FTX CEO Sam Bankman-Fried and top NFT projects planning to leave its blockchain.

But some are crediting the recent spike to interest from Solana community members in Bonk (BONK), a new meme token that airdropped about 50% of its 56 trillion token supply to users last week. Airdropping is when a cryptocurrency sends a free supply of its token to a number of crypto wallets in a way to gain users or reward loyal community members. In this case, Bonk was airdropped to

“We’re here to reward everyone that made #Solana what it is today,” the Solana-focused dog coin tweeted about a month ago before gaining traction.

About 20% of Bonk’s total airdrop supply went to Solana NFT collections, which consisted of almost 300,000 individual NFTs. The shiba inu dog-themed cryptocurrency has risen about 96% in the past 24-hours, according to CoinGecko data.

Even some major Solana projects have considered (or did) adopt the newly launched token from large decentralized exchanges like Orca to NFT markets like Magic Eden.

While Bonk gains steam, it’s highly likely that it will have a similar fate to other meme or dog-focused crypto tokens that often see a pump, followed by a steep dump and little to no recovery. In the meantime, however, it has helped the Solana ecosystem gain momentum in a time when many crypto players saw it as a goner.

As there has been some slight recovery for Solana, its future remains uncertain even amid its dog coin-related hype. As of today, Solana has dropped from being the fifth-largest token in early November to 15th-largest and is the number one trending cryptocurrency on CoinMarketCap.

Solana price spikes as newly launched dog coin BONK gains community hype by Jacquelyn Melinek originally published on TechCrunch

TikTok has announced that it’s expanding its audience controls feature, giving creators the ability to restrict their videos to adult viewers. Prior to this expansion, the adult-only audience controls feature was only available for TikTok Live. Now, the company is bringing the feature to its short-form videos as well.

“We’ve started to bring our audience controls feature to creators of short-form video and will expand the feature globally over the coming weeks,” TikTok wrote in a blog post. “To be clear: our policies still fully apply to creators who use this feature, and we will remove content which contains nudity and other violations of our Community Guidelines.”

As is the case with adult-only livestreams on TikTok, the 18+ restriction setting for videos isn’t a way for creators to display adult content, as the content is still subject to the app’s policies. TikTok instead sees the setting as a way for creators to prevent minors from encountering content that’s aimed toward an adult audience or may be uninteresting to them. When TikTok rolled out adult-only livestreams, the company said the setting could be used for creators who want to share comedy content that is better suited for people above the age of 18. Or, creators may want to talk about a difficult life experience and would feel more comfortable knowing the conversation is limited to adults.

The expansion of the audience controls setting comes as TikTok previously said it wanted to start identifying which content is appropriate for younger and older teens versus adults. TikTok had said it was developing a system to identify and restrict certain types of content from being accessed by teens and that it would start asking creators to specify when their content is more appropriate for an adult audience. We are now seeing this in practice with the app’s audience controls feature.

TikTok has also announced that it’s launching the next iteration of its of its borderline suggestive model, which automatically identifies sexually explicit, suggestive or borderline content. The next iteration of TikTok’s borderline suggestive model is expected to be better at detecting such content.

These announcements are part of TikTok’s broader push toward ramping up safety features for teens on its app. Last year, TikTok rolled out Content Levels to prevent certain content with more mature or complex themes from reaching teens. As part of these efforts, TikTok says it has prevented teen accounts from viewing over one million overtly sexually suggestive videos in the last 30 days alone.

Child and teen safety is an area where TikTok has faced significant scrutiny, not only from regulators and lawmakers, but also from parents. For instance, last year a group of parents sued TikTok after their children died after attempting dangerous challenges they allegedly saw on TikTok.

TikTok begins rolling out the ability for creators to restrict videos to adult viewers by Aisha Malik originally published on TechCrunch