The third quarter numbers are in for 2016, and that means an update on how VC investment looks like. This time, we’ll focus on seed investments, a metric that indicates how many venture risks capitalists are willing to make. It’s 20 percent fewer than last quarter.
The Data
I can’t expain it any better than Primary Venture Partners, who covered the relevant data in a concise breakdown:
“Q3 2016 saw just 32 Seed deals, totaling $57.5MM. The quarter saw 29% fewer deals than Q2 and 57% fewer than this quarter last year. From a dollars standpoint, we’re now down 21% from Q2 2016, and 34% from Q3 last year. As it stands, the VC funding total for startups in 2016 is on pace to see a 25% drop from 2015.”
This data, the source notes, only covers public deals between $250K and $3.5MM, so some private deals might throw off the numbers. Overall, however, it’s pretty clear which direction the trend is moving towards.
As with last quarter, the trend shows that VCs are doubling down on sure bets, making larger deals on proven companies while lowering the overall number of deals.
It’s hard enough to get a seed investment that any startup should be considered on a case-by-case basis, meaning that this news likely won’t impact anyone’s plans. But somewhere out there, some startups are getting a more limited seed investment, and getting less money for the investments that they do get.