KUHN CAPITAL Thursday, October 19, 2017
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VC Start-Up Funding at Four-Year Low

July 30

An industry survey shows that venture capitalists committed $5.7 billion to start-ups in the second quarter of this year, the lowest such level since the last quarter of 1988.

The latest quarter is 55% below that of the same period last year. And according to the PricewaterhouseCoopers survey, two-thirds of the money spent went to "expansion stage" companies -- which typically spend their VC money on marketing and sales activities -- rather than to those seeking investment in R&D.

The poor IPO environment is forcing many VCs to spend time "triaging" their investment portfolio, deciding which to kill and which to continue supporting.

When VC's do decide to invest in new opportunities, one quarter of their investment dollars are going to biotech and medical device enterprises. Bottom line: IT start-up entrepreneurs are looking at an increasingly difficult funding challenge.


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