2017 Predicted a Strong Year for Venture Capital

Experts are unanimous that 2017 is going to be a strong year forĀ Website. Most of the VC firms are flush with fresh funds and the valuations of the start ups are also more reasonable than before. Also, tech markets are robust in present times. Another factor that tells that sanity has returned to venture capital is the fact that firms are no longer obsessed with funding of unicorns and that too at the expense of small companies. All of this points that it is going to be a very good year for venture capital.

 

There are signs that venture capital is making a return to its grassroots. It is all about pumping money into start ups that look promising and appear to have the potential to become giants later on. These are the deals that have always brought the highest rate of returns for VC firms.

 

It is not that 2016 was bad for VC. But all trends suggest that 2017 will be better in all respects. VC firms did not find it difficult to raise funds last year. They are flush with funds right now and eager to invest in fresh start ups this year. As these companies are more reasonably valued now, VC firms are expected to invest money liberally into them. If one reflects on 2016 from the point of view of VC, it appears that it was all about rebuilding. Investments had shrunk in 2015 and it was consolidation all the way for VC firms in 2016.

 

The talking point in 2016 was the dramatic decrease in the number of unicorns valued highly. This number for unicorns valued at $1 billion or more declined from 23 to just 9 in 2016. However, two of these unicorns, Snapchat and Uber, gulped down all the money they needed for their growth and expansion. This left little money for smaller companies.

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