Venture Capital Takes a Big Dip - Investment Dollars Declined Dramatically in 3Q
Tuesday, October 13, 2015
Billions are still being invested in early stage companies, but venture capital investment in startups dropped by about one-third.
As investors grow warier of the rising temperature in the VC ecosystem, the count of angel/seed financings has fallen dramatically. The risks are greatest at this stage, rendering the type of round size inflation evident in the chart to the right less justifiable,” according to PitchBook’s Venture Industry Report.
As GoLocalWorcester reported in May, the first class of StartUp Worcester's winners have been announced and the twelve winners come from five Worcester college campuses and include three digital game developers, a real estate developer, a hydronics company, and technology companies focusing on city engagement, fitness and transportation and a fashion blog/consultant.
StartUp Worcester, a partnership between the Worcester Regional Chamber of Commerce, the Venture Forum and Running Start, announced the winners at a reception.
The PitchBook report unveils that both dollars and number of deals feel dramatically in the third quarter. In 1Q total number of Angel/Seed, Early venture capital and late venture capital were 2,269 and totaled more than $23 billion. By 3Q, the number of deals feel to 1,444 and less than $15 billion.
“In light of that, it is unsurprising that the 577 completed angel/seed financings in 3Q represents a 34% drop from 2Q numbers. What is surprising is that capital invested is still lofty at close to $1.7 billion. Investors are still willing to cut sizable checks, with well over half of all angel/seed capital invested in rounds worth $5 million or more. Part of that is due to the founders that are currently fundraising are adapting to today’s venture climate and asking for enough capital to reach the metrics,” said PitchBook.
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