2017 Venture Capital Predictions
So you’re raising capital…have you heard any of these common rejections before:
- I’m sorry, but you’re not bankable yet
- We love your business, but you’re a little earlier stage than we like
- We don’t see this as a fit at this time
- We are hesitant to invest as the lead, but keep us informed if you get a lead term sheet
- You are slightly too early for our firm and we can’t see around the curve yet
- We would like to see more months of [insert metric] before we feel comfortable moving forward
2016 was a year where investment trends frowned upon the entrepreneur. Pitchbook published a state of venture capital in October that validated what entrepreneurs were feeling in 18 simple and insightful charts. Despite less than favorable trends, there is a lot to be hopeful about.
The significant amount of sidelined cash in VC coffers should continue to bolster investment.
2017 Crystal Ball
- Record amounts of capital raised by VCs in 2016 and a relatively small portion of it has been deployed
- Startup valuations have declined to more reasonable levels (drives both VC investment appetite and M&A exits)
- With the stock market up, and particularly the tech sector, optimism is building in the economy which spurs investment as well
We continue to be bullish on 2017 investment as well. But rather than simply be hopeful that the investment community loosens its grasp on cash reserves, the most important thing you as an entrepreneur can do is run your business. Strengthen your underlying metrics. Create something that simply can’t be refused despite the investment environment. I know…easier said than done…but gritty and optimistic entrepreneurs are still getting it done.
David Chase, Managing Partner at Advanced CFO, has experience in small to medium private companies and large public companies as a senior operational and financial leader. With 17 years in finance, a CFO of multiple entities and divisional EVP experience, Dave has a breadth of experience. Dave has led or been instrumental in raising multiple rounds of equity and debt in excess of $450 million.