Venture capital: $ 77 billion invested in the United States in 2015
2015 is considered to be an exceptional year in terms of venture capital investments in the United States, we learn from reading the study “Upfront VC Analysis 2016“, produced by Upfront, an American venture capital firm, and published in February.
With 77 billion dollars invested over the year, and more than 8,000 transactions carried out, activity continues the trend observed since 2009. In six years, the number of transactions carried out has multiplied by 1.8 and the amounts raised. have practically been multiplied by 3.
Seeding investments have increased the most in terms of the number of operations (+ 22%); in terms of value, it is the investments in “later stage” which increased the most (+ 36%).
More money available, but fewer exit operations
Despite a slight slowdown in 2015, American venture capital funds have regained their ability to raise pre-crisis funds: $ 28 billion raised in 2015, compared to $ 25 billion in 2008. The trend should continue in 2016 .
Beyond the fact that there is more money available, professionals have noted the arrival of “non-traditional” investors (ie who are not venture capital companies). These have increased by 15% per year on average since 2012.
It should be noted that at the same time as this phenomenon of increased investments, the number of merger and acquisition transactions decreased, going from 542 transactions in 2011 to 473 in 2015. Likewise, IPOs decreased, in number as well as in value (-32% in number and -38% in value between 2014 and 2015).
82% of “cautious” investors for the coming year
Another reality that we are starting to talk about little by little: the stock valuations of tech companies have fallen more than in proportion to the evolution of the NASDAQ in recent months.
More than 90% of investors surveyed for this study believe that non-public market valuations of companies will follow the same trend in 2016; they are even a third to expect “significant corrections”.
62% of them state that they advise companies in their portfolio to adopt a cost reduction policy. Birchbox, taken as an example in the study, said in January 2016 that it would lay off 15% of its workforce, citing funding uncertainties as the reason.
Finally, 77% of investors feel that the negotiations are going to take longer, and that the pace will continue to slow down in the months to come.
They are 82% to say they are “cautious”, or even “concerned” by the outlook for the coming year.
They believe that by adopting a strategy of prudence in their short-term investments, it should reap the rewards within 3 years. In spite of everything, investment professionals remain confident in their ability to support high-potential companies that request them.
** Survey of 159 venture capital funds, mostly American (7 funds surveyed are considered international). They invest in seed or early stage for 67% of them, and have been in activity for less than 10 years at 61%. One third of respondents have between 6 and 10 years of investment experience; a third have more than 15 years of experience in the trade.
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