With the growing number of start-ups across the country, it is only fitting that the trends in the Venture Capitalist departments also change in accordance. 2016 was a great year when venture capitalists chose to flow in money as high as $100 million to start-ups and mid-level companies.
Here are a few venture capitalist trends in 2017 you need to know about:
1. Corporate deals
More corporations are choosing to invest in smaller companies and start-ups because of the wonderful ideas these companies bring forth. The rewards for these investments go beyond finances as the investors get more control, strong suppliers and de-risk innovation. Studies have shown that Asian countries are the biggest hubs for investments across the globe as they provide these corporations with stellar returns.
2. Competition for the VCs
The VCs are facing early stage competitions even though the number of start-ups are increasing. More start-ups are looking towards other sources like personal investments and crowdfunding to fund their project as the most investors refuse to invest money in early-stage projects. However, this trend is believed to be changing as investors are facing stiff competition which will make them invest in projects in their initial stage as well.
A new Cambridge Associates report points out that, “Seed and early-stage investments have accounted for the majority of investment gains in every year since 1995, suggesting that despite the deep pockets of late-stage investors, early-stage investments hold their own on an apples-to-apples basis (total gains).”
Related Post: How to get finance easily for your startup
3. The number of funds are rising
This is a trend which is very apparent across all countries and looks like its here to stay. When we look into Indian investment stories, we observe that a lot of companies like Ibibo and Snapdeal have received huge amounts of funding from popular investors in the past year which is close to or more than $100 million. The funds to be generated in 2017 are estimated to be higher than those of 2016.
4. More focus on investor education
The number of investors and the amount they are ready to shell out are definitely on an all time rise. However, most investors aren’t very educated on the asset class which often leads to bad decisions. Thus, the concept of education for the investors will be more focused on as investors will try and learn more about ventures and the local economy for a better understanding of what they are investing in.