VC investment has been skyrocketing lately, but why? Let’s discuss some of the trends that are driving bigger investments in today’s startups.
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SHOW NOTES:
- $156B in VC activity in Q2 2021, and $288B for Q1/Q2 combined
- Tiger Global: the investor ruffling Silicon Valley feathers
- The Figures that Will Move the Venture Capital Market in the Next 5 Years
- Global Interest Rates
WHEN AN A-ROUND IS THE NEW C-ROUND
Why is so much money being invested by VCs over the last 12 months, and what trends are pushing them to make bigger bets?
LET’S FOLLOW THE MONEY AND THE NUMBERS
- Global interest rates are very low, since 2017, accelerated by the COVID pandemic
- Tons of government money was pumped into the global economy
- Tech is consolidating around 3-5 major cloud providers, with massive tech amounts of capital and engineering.
- There is really no longer a middle ground in the tech industry. There are startups and there are the big clouds.
- Cloud providers make some acquisitions, but they need big numbers to move the needle.
- Today’s technology challenges are large in scale - AI/ML, Self-Driving Vehicles, Genetic Testing (Vaccines, Pharmaceuticals) 5G, Energy Discovery and Optimization, Everything Delivery, etc.
- The stock markets are continuing to reward tech profits, and markets are overly weighted in tech.
- Cloud and SaaS has changed the sales and marketing model, as well as the CAPEX/OPEX model, so new companies can be modeled more consistently
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