Southern Equity

We’re entering a new chapter at Southern Equity. 🌍 As we continue to evolve, we invite investors, founders, and innovators to follow along as we share industry insights, portfolio updates, and perspectives on the trends shaping the future.

Tag-along rights, also known as co-sale rights, are designed to protect minority shareholders. If a majority shareholder sells its stake, minority holders can choose to join the sale at the same price and terms. ⇢ These rights are common in venture capital and private equity, where shares in private companies can be difficult to sell. They may give founders, early investors, and employee shareholders access to liquidity they might not be able to negotiate on their own. Tag-along rights are often contrasted with drag-along rights, which allow majority shareholders to require minority holders to sell alongside them. Together, the two provisions can help balance the interests of majority and minority owners in a sale. ► Learn more about tag-along rights: investopedia.com/terms/t/tag… #VentureCapital #PrivateEquity #PrivateMarkets #Startups #Glossary

Mercury has launched @Mercury Books—an accounting product built directly into its banking platform, designed to close the gap between where money moves and where it gets recorded. Rather than syncing data across separate tools, Books pulls transactions in automatically as they happen, categorizes them in real time, and keeps reconciliation running continuously in the background. Financial reports reflect current data rather than requiring manual assembly ahead of board meetings or fundraises. Mercury Command can field questions about your books or take on bookkeeping tasks in plain language. ⇢ We're inspired to see Mercury continue expanding what's possible when banking and financial operations live in the same place. ▶︎ Read more about the announcement: mercury.com/blog/introducing… #PortfolioNews #Mercury #Fintech #StartupBanking #AI #PrivateMarkets #VentureCapital

Private capital entered 2026 expecting a busier dealmaking environment. Instead, the market appears to have become more selective, according to PwC's mid-year outlook. ⇢ Citing PitchBook data, PwC reports that 34% of PE-backed companies had been held for more than five years as of March 2026, up from 28% in 2025. Meanwhile, Q1 deal count was roughly flat year over year, while deal value reportedly fell 14% to $482B. An aging portfolio base could potentially add pressure on sponsors to return capital to LPs. PwC suggests firms with strong Distributed to Paid-In Capital (DPI), credible value creation plans, and the ability to deploy through uncertainty may be better positioned, while others could face longer fundraises and tighter exit windows. Until IPO markets broaden, secondaries, continuation vehicles, and corporate sales may remain key paths to liquidity. ► Read the full outlook: pwc.com/gx/en/services/deals… #PrivateEquity #PrivateMarkets #MergersAndAcquisitions #Liquidity

Middle-market PE firms appear to be moving down market, according to PitchBook. US PE deals valued between $25M and $100M rose 70.6% in value quarter over quarter to $16B in Q2, the only middle-market segment to grow. Smaller companies are reportedly trading at 8.5x EV/EBITDA (a company's total value relative to its operating earnings), compared with 13.2x for those valued at $500M–$1B. Could lower entry multiples make the lower middle market PE's next big opportunity? ► Read more: pitchbook.com/news/articles/… #PrivateEquity #MiddleMarket #PrivateMarkets

An earnout is a contractual provision in which part of a business's purchase price is tied to its future performance. The buyer pays a portion upfront, and the seller may receive additional compensation if the company meets agreed-upon targets over a set period. These targets are often based on revenue or EBITDA (earnings before interest, taxes, depreciation, and amortization), a common measure of a company's operating profitability. ↩︎ Earnouts are often used when buyers and sellers can't agree on a valuation. They may reduce upfront risk for the buyer while giving the seller a potential share in future growth. Because payouts depend on how results are measured, earnouts can also lead to post-closing disputes. Clear terms around metrics, accounting assumptions, timelines, and the seller's role after the deal are typically considered essential. ► Learn more: investopedia.com/terms/e/ear… #PrivateEquity #MergersAndAcquisitions #PrivateMarkets #DealMaking #Glossary

The Federal Reserve raised interest rates for the first time since 2023 in September, bringing the federal funds rate to a target range of 3.75%–4%. ⌲ The move comes as PE exits face ongoing headwinds. PitchBook data shows US PE exit value fell 46.3% quarter over quarter to $102.6B in Q2, with middle-market exits at their lowest level since Q2 2020. Median hold periods for US PE assets reportedly reached 4.5 years, among the highest in roughly two decades. According to PitchBook, a single hike may not have a significant impact on its own. However, if further increases follow, higher borrowing costs on floating-rate LBO debt could potentially add pressure to exit activity, particularly in the middle market. ► Read more: pitchbook.com/news/articles/… #PrivateEquity #PrivateMarkets #InterestRates #Exits

Earlier this year, @BainandCompany described private equity's 2025 rebound as a K-shaped recovery: deal value rose 44% to $904B, but deal count fell and just 13 megadeals drove much of the growth. ↖︎ Nine months later, the data suggests that pattern is holding. Global PE investment topped $1T in the first half of 2026, according to KPMG, even as rolling deal count fell to its lowest level in more than five years. Exits also slowed, with 1,315 in H1, the slowest pace in over a decade. Capital appears to be concentrating in fewer, larger, high-conviction deals. For LPs still waiting on distributions, a broader recovery may depend on exit activity picking up across the wider market, not just at the top. ► Read the full report: bain.com/insights/topics/glo… #PrivateEquity #PrivateMarkets #DealFlow #Investing

Cybersecurity startups raised $10.6B globally in the first half of 2026, holding near historically high levels despite AI megarounds dominating the headlines, according to @Crunchbase. Q2 was slower, with funding down roughly 30% from the prior quarter to $4.4B. Still, the quarter produced eight rounds of $100M or more. Given how strong the prior two quarters were, the Q2 dip may not signal a broader pullback. As AI agents become more widespread, demand for more sophisticated security tools could potentially continue to support investment in the space. ► Read the full breakdown: news.crunchbase.com/cybersec… #Cybersecurity #VentureCapital #AI #Startups #PrivateMarkets

A side letter is a legally binding agreement that gives a specific limited partner (LP) tailored terms outside the fund's limited partnership agreement (LPA). ⇢ Common side letter terms include fee discounts, more detailed reporting, co-investment rights, and most favored nation (MFN) clauses, which let an LP adopt better terms granted to other investors. Some LPs also negotiate excuse rights, which allow them to opt out of deals that conflict with their internal policies. Side letters are often key to securing institutional capital, but they can add operational complexity. Because private funds can run a decade or longer, managers typically need a clear system for tracking these obligations across the full fund lifecycle, as well as systems in place to manage the resulting conflicts that can arise. ► Follow Southern Equity for more private markets terms explained. #PrivateEquity #VentureCapital #PrivateMarkets #FundManagement #Glossary

PlayVS has announced it is now reorganized and fully financed, with a newly formed leadership team in place to guide the company's next stage of growth. Jonathan Boswell—who has been with PlayVS for nearly seven years, most recently as Chief Technology Officer—has assumed the role of CEO. Juanita Russell continues as CFO, and Charles O'Donnell has been appointed Chief Revenue Officer after leading partnerships at the company. ⇢ We're inspired to see @PlayVS stabilize and move forward with a new leadership team and a long-term vision for what scholastic esports can become—connecting students to competitions, curriculum, and real career pathways through gaming. ▶︎ Read the full update: playvs.com/community-update-… #Esports #ScholasticEsports #Gaming #EdTech #PortfolioNews #VentureCapital #PrivateMarkets #PlayVS

This summer, Anthropic raised $65B in a Series H, more than doubling its post-money valuation to $965B, according to Crunchbase. ↖︎ The next-largest round was a fraction of that size: Cognition, the developer of AI software engineer Devin, closed over $1B at a $26B valuation. Beyond AI, sizable rounds also went to companies in logistics, insurtech, fusion energy, space tech, and healthcare. The gap between the top deal and the rest of the list may suggest that capital remains heavily concentrated among a handful of AI leaders. Still, steady nine-figure rounds across other sectors could be a potential indicator of investor appetite extending beyond foundational AI. ▶︎ Read the full breakdown: news.crunchbase.com/ai/bigge… #VentureCapital #AI #Startups #Funding #Anthropic #Cogniton

US startups raised more than $400B in the first half of 2026, already exceeding every previous full year on record, including all of 2025, according to the PitchBook-NVCA Venture Monitor. ⇢ Fundraising also rebounded sharply, with VC firms raising nearly as much through June as they did in all of 2025. Exit activity picked up in Q2 as well, with IPOs and M&A both accelerating. The headline numbers appear strong, but the data suggests the recovery is still uneven. Most invested capital went to AI companies and $100M+ rounds, and fundraising was concentrated among a small group of established managers. A broader reopening of the exit market could be key to extending liquidity across the wider ecosystem. ► Read the full breakdown: nvca.org/pitchbook-nvca-vent… #VentureCapital #PrivateMarkets #AI #Startups

Global venture funding reached $42 billion across just over 1,500 startups in August 2026—down 25% from July but up 122% compared to the same month last year, according to Crunchbase data. Seven companies raised billion-dollar rounds during the month, with capital flowing across AI, defense, aerospace, nuclear energy, and home battery technology. ⇢ The pace of megadeal formation appears to be accelerating. Five of August's seven billion-dollar recipients had last raised capital less than 12 months earlier—three within the same year—suggesting investors are doubling down on their highest-conviction bets faster than at any point in recent memory. ► Read the full breakdown: news.crunchbase.com/venture/… #VentureCapital #PrivateMarkets #StartupFunding #AI #DefenseTech #Investing #GlobalVC #Crunchbase

Physical AI—software that enables machines to perceive, reason, and act in the real world—is attracting significant investor attention. According to @SiliconVlyBank's latest report, physical AI and robotics startups raised $9.6 billion globally in H1 2026, on pace to surpass 2025's full-year total, with humanoid robotics accounting for a growing share of both deal count and dollar volume. ⇢ The data could potentially suggest the sector may be at an inflection point. Manufacturing, logistics, and healthcare are emerging as the primary deployment environments, while a small number of well-capitalized companies are pulling ahead on hardware-software integration—a combination that appears increasingly difficult to replicate and may represent one of the more durable moats in the current AI landscape. ► Read the full report: svb.com/trends-insights/repo… #PrivateMarkets #VentureCapital #PhysicalAI #Robotics #AIInvesting #EmergingTech #StartupFunding #Innovation

According to Pitchbook, secondaries generated a 20.6% average gain at private foundations in 2025—the highest return of any alternative asset class. But there's an important caveat: much of that performance may reflect accounting treatment rather than actual cash distributions. According to Mark Hoeing, president and CEO of CF Private Equity, secondary buyers typically purchase assets at a discount and mark them to par after purchase. Against a backdrop of record secondary deal volume—surpassing $120 billion in H1 2026 alone—that practice is producing strong one-year IRRs that may not fully reflect realized liquidity. ► Read more: pitchbook.com/news/articles/…

Large exits are happening at a near-record pace in 2026—but the returns may not be keeping pace with the cost. The median company exiting above $500 million has raised $323.7 million to get there, more than double the figure a decade ago, while exit step-ups have collapsed from 62.8% in 2021 to 15.5% in 2026. ⇢ Is the traditional case for venture risk starting to shift? ► Read the full report: pitchbook.brightspotcdn.com/…

Nearly 90 new unicorns* have been minted so far in 2026—and while most are AI-related, the class is more diverse than the headlines suggest, spanning healthcare, defense, crypto, robotics, and energy. ⌘ The pace of unicorn creation appears to be accelerating alongside the broader AI investment boom, with new companies reaching $1B+ valuations at earlier stages and on smaller amounts of total capital raised than in prior cycles. ► Read the full breakdown: techcrunch.com/2026/07/05/al… *A unicorn is a privately held startup valued at $1 billion or more.

Cybersecurity startup funding is holding at historically high levels in 2026, even as AI megarounds dominate the broader venture landscape. Global funding to security and privacy-related startups reached $10.6 billion in H1 2026, with eight rounds of $100 million or more closing in Q2 alone. ⇢ Exits are also occurring, with M&A activity picking up in the absence of a more active IPO market. As AI agents continue to proliferate, demand for more sophisticated security infrastructure to monitor their activity could suggest a structural tailwind for the sector that extends beyond the current cycle. ► Read the full breakdown: news.crunchbase.com/cybersec…