Is This Is What the Funding Apocalypse Looks Like?

September 7, 2016

4:00 pm

Back in Q1, you couldn’t swing a dead cat without hitting someone advising startups that the world, as they knew it, was coming to an end. Venture dollars flowing to startups had decreased from $16B in Q3 ’15 to $12B in Q4 and VCs were telling anyone who would listen that nuclear winter was in sight and funding would be drying up. The media just ate it up. Take a look at just a tiny sample of headlines from early Q1.

Imagine my surprise when I opened PWC’s VC Q2 Money Tree report (okay, I’ll admit that I wasn’t surprised at all). Take a look at the chart from their report below. Not exactly the apocalypse everyone was predicting, right? To be fair, while dollars have increased again, the number of deals fell by about 5 percent (suggesting that larger dollars were going into some later stage companies).

I wrote a post about all this in February and my advice to founders remains the same as it always is. Raise more than you think you need. Price your rounds to avoid the pain of stacked notes. Watch your expenses. But whatever you do, don’t pay attention to what anybody’s saying about the macro because they’re all full of shit.

Will the funding environment get worse for startups? Yes, of course it will. Eventually…[read more]

This post was originally published on Mark’s blog.

This is a preview of “This is What the Apocalypse Looks Like?”. You can read the full post here by visiting Techstars.

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Mark Solon is a Managing Partner at Techstars. Previously, he co-founded and helped build Highway 12 Ventures and was a General Partner at Atlantic Capital Group. He shares his thoughts on startups and entrepreneurship at his blog – http://towriteistothink.com.

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