What Is Going On Out There?
The third quarter venture funding stats were released today by National Venture Capital Association (I am on the NVCA Executive Committee so am a big fan of their data) – always makes for entertaining reading. It is a little bit like looking for clues, especially in this market to help explain what the hell is going on out there. .. The overall investment pace was quite impressive given that the quarter included a wild August in the stock market and the vacation slow down; investments totaled $6.95 billion in 876 deals. In 2Q11 there were 1,015 deals which raised $7.88 billion but in 3Q10 there were only 850 deals which raised $5.31 billion, well-below this past quarter. It feels like the VC industry is on pace to invest close to $28 billion this year, which continues to baffle me as VC’s will struggle to raise $15 billion in new funds. This will be the third consecutive year when the industry invested meaningfully more than it raised. That will probably end badly. Couple of interesting observations I pulled out of the data with my calculator…
