Rocket Growth in Venture Investment Activity for 2014
Look at the data, and you’ll go “Wow.” According to TechCrunch, Forbes and other sources venture capitalist investments are shooting through the roof. Investments in new startups rose to almost $6 billion, up from $3.5 billion for the same period last year. This could mean that venture capitalists are optimistic for startup investing this year.
In fact, some capitalist believe 2014 will be the year to beat all years when it comes to venture capital for young startup companies, despite the concerns of some finance industries and professionals in the first quarter of the year. This is the message delivered by many venture groups throughout the nation.
According to Forbes Magazine, this year will be a good one for young startup companies needing to raise money. These predictions are not unfounded. They are based on the nationwide increase of venture capital funding; an increase of 7% over the $29 billion in funding distributed last year.
What Does The Future Hold?
In 2014, corporations, financial gurus and VCs expect to see more venture investment and higher investment returns. This is higher than the 43% increase we saw in 2013. Most investors believe there will be a substantial improvement in funding, and they foresee higher company valuations for startups.
Where is the Money Going?
Successful startup CEOs and venture capitalists expect certain types of startups to be preferred over others. Those that offer products in business IT, Consumer IT and Healthcare IT are thought to be of more interest to venture capitalists. By the same token startups in areas such as clean technology, medical devices and biopharmaceuticals may see a decrease in funding opportunities. However, this doesn’t mean the startups on the downside of the chart have no hope of getting funding. It just means they need to hone their strategy. Put their business in a favorable light and show investors why this startup is innovative, creative and a good investment.
Hope and Reality
Though the first quarter of 2014 shows an optimistic outlook for venture capital funding, it’s still a little early in the year to make a strong determination. Expectations of higher valuations, improved IPO and increased startup funding would benefit the consumer, the economy and the startup, and increased optimism may attract more investor interest, but real statistics are still in the waiting.
Increasing the Chances of Finding Venture Investment
Of all the avenues available to raise capital, venture capitalist funding is the toughest. Even so, startups often record this avenue as the most successful. But before you take your business idea to a VC you must have an idea or business that offers a strong profit potential. Venture Capitalists are interested in profit – and they often expect a return of about 35% per year.
VCs are tough and they have stringent rules, so you need to be prepared – and you need the right mindset. Always keep in mind that these are professional investors who know the ropes. They need to know why they should give a damn about your specific proposal.
As a startup, placing a proposal in front of Venture capitalists you must be prepared for both success and failure.