Marich: VC starts 2016 down, but poised for expansion?

Editor’s note: This post was republished with permission from the Ewing Marion Kauffman Foundation’s Policy Dialogue blog.

Regardless of which source you consider, the amount of money venture capitalists invested in startups in the first quarter of 2016 has dropped.

The latest PwC/NVCA MoneyTree Report based on data from Thomson Reuters, show that VCs invested $12.1 billion in 969 deals in the first quarter of 2016 — an 11 percent decrease for both when compared to Q1 totals in 2015.

Meanwhile, the Venture Pulse Report from CB Insights and KPMG show the figures at $14.8 billion in 1,035 deals — dropping $3.4 billion and 307 deals when compared to Q1 2015.

Prefer Dow Jones VentureSource? Those figures are $13.9 billion and 884 deals — the lowest totals in four years.

Differences in methodology and definitions account for the variations in the estimates but all signs point in the same direction.

But the news isn’t all bad in the industry as VC fundraising totals are going the opposite direction, meaning that more dollars could be flowing soon. The same MoneyTree Report showed $12 billion raised in 57 funds in the first quarter of 2016, making it the biggest quarter for venture capital raised since the second quarter of 2006 when $14.3 billion was raised by 79 funds.

The question is “Will those dollars be deployed to the startup ecosystem soon?”

Mark Marich, executive vice president of Global Entrepreneurship Week | Courtesy of the Ewing Marion Kauffman Foundation
Mark Marich

Mark Marich is the executive vice president of Global Entrepreneurship Week. Since 1998, Marich has provided communications leadership on several national initiatives and more than 100 public forums covering a wide range of policy issues, including: entrepreneurial growth and economic development, health care, renewable energy, telecommunications, regulatory reform and workforce development.

He is a regular contributor to the Ewing Marion Kauffman Foundation’s blogs, which are syndicated by Missouri Business Alert.

Find Marich on Twitter: @markmarich.


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