Funding your startup is harder than ever now (thanks, VC firms)
Apr 19, 2024
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Explore the challenging landscape of startup funding in 2024 with a decline in VC investments. Discover why VC firms are burnt out and which startups are still getting funded. Plus, get insights on 23andMe going private and Taylor Swift's lucrative new album.
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Quick takeaways
VC funding for startups has significantly decreased in recent years, making it more challenging for founders to secure funding.
Accessing funding opportunities has become more varied and accessible for startup founders through platforms like AngelList and niche platforms for specific demographics.
Deep dives
A Shift in Venture Capital Investments
Venture capital funding for startups has significantly decreased over the past few years, with investments dropping from nearly $700 billion in 2021 to $285 billion last year. This decline has made it more challenging for founders to secure funding. The trend continues in 2024, with Q1 global startup funding totaling $66 billion, similar to 2023. Despite the overall decrease in funding, specific industries like biotech, healthcare, and AI continue to attract substantial investment.
Accessibility to Funding Opportunities
While the overall funding pool has shrunk, accessing funding opportunities has become more varied and accessible for startup founders. Platforms like AngelList and WeFunder offer starting points for many entrepreneurs, with new niche platforms emerging, such as one for Latina founders. Initiatives like Cherub, similar to a dating app but for connecting founders with investors, aim to facilitate more conversations and opportunities for funding.
Shifting Investor Priorities and Scrutiny
Investors are now more cautious and scrutinizing potential investments more thoroughly compared to previous years, where certain trends like blockchain gaming attracted substantial funds with less scrutiny. The current market demands a higher level of due diligence and evaluation, making it challenging for founders to secure funding. Despite the increased scrutiny, there are still avenues for startups to gain visibility and attract investment, particularly in industries like AI and biotech.
The golden age of VC funding is over as we’ve seen a year over year drop in investment amounts across the board. This may be alarming for new businesses looking to get their big break, but it's not all doom and gloom in 2024. So why are VC firms burnt out nowadays and what kinds of startups are getting those much-needed investments? Plus: 23andMe may go private and Taylor Swift’s new album is seeing dollar signs.
Join our hosts Jon Weigell and Ben Berkley, as they take you through our most interesting stories of the day.
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