10 Growing Trends In Venture Capital for 2016
Is it getting harder for startups to raise money?
If you’re raising money for your startup (or keeping an eye on your own investment options), here are a few big trends to keep in mind next year. Mark Haefale, global CIO at UBS Wealth Management, recently remarked, “the US equity surge is now in its seventh year, making it the longest bull run since World War II.”
This record year ends well north of $100 billion flowing into startups. Here are some of the contours you’ll see in the venture capital landscape of 2016.
1. More corporate deals.
Many corporations are choosing to invest in small companies to inspire their innovation process. They get rewarded in many other ways than pure financial returns–including creating stronger suppliers, putting control levers in their industry, testing products, de-risking innovation, and engineering less expensive acquisitions.
In 2015, corporate venture participated in about one out of five deals in the United States or Europe, and one out of three deals in Asia. Founders will increasingly study how to attract and engage these deep pocketed investors. That creates greater competition for traditional financial VCs to differentiate and prove their value to entrepreneurs.
2. More incubators and accelerators.
Corporate sponsorship is one of the many updrafts supporting the surge in incubators and accelerators. Around accelerators, early stage dollars flow more aggressively, a recent MIT study concludes. They also seem to lift their regions economically, although indirectly. There are an estimated 2,000 incubators across the country, with more opening almost weekly.
