The VC Market in the US
We all are fully aware of the state of our current economy. Some of us, as individuals, have been greatly affected and many businesses have failed or even have struggled vastly in these last few years. Regardless of those that lose ground in a recession, fact remains, many companies still thrive because there is still a need to be fulfilled for people in general. Efraim Landa is very aware of this and helps those in need of financing make an educated decision as to what route to take in seeking investors.
When a company can brilliantly offer a service or product that is needed regardless of the signs of the times, a business can thrive in today’s day and age. More importantly, new companies come about in a tough economy because there is a need to fill. There are many options for funding. In the US, venture capital funding has settled around $15-20 billion annually. This is a low number compared to previous years; however, there is plenty of funding available.
As Tech Crunch stated in 2011, Venture Capital funding fell by 50% from 2008 and 2009, in the first quarter alone! These drastic numbers total $3.9 billion in loss, according to Dow Jones Venture Source. That’s the lowest drop since 1998. Information technology investments fell at about 53% year-over-year to $1.7 billion. This was the lowest drop in information technology since 1997. What about clean tech, our future? It, also, fell by 74% to a low figure of $117 million. Again, this isn’t completely recession driven, as stated before; many companies are doing fine in this recession. Investments in startups have gone down substantially, but investments in VC firms didn’t fall as low as suspected. Firms raised smaller funds then what was of the norm previous to the economy downfall.
As stated, many firms are doing very well in this recession. Virtual Capital Farmer revealed the top 10 VC firms based on Investor Rank.
Top 10 VC firms
- Andreessen Horowitz – popular companies they invested in are Twitter, Skype, Facebook, Groupon, Foursquare, and Jawbone.
- Sequoia Capital– some of the companies they invested in are Airbnb, Apple, Aruba Networks, Google, YouTube, PayPal, Instagram, Cisco Systems, Oracle, Electronic Arts, Yahoo!, NVIDIA, Atari, Zappos, and LinkedIn
- Accel – some of the companies they invested in are Facebook, Groupon, Dropbox, 99designs, Spotify, Etsy, Angry Birds (Rovio), Braintree, Lookout, Macromedia, metroPCS, and Walmart.com
- Benchmark Capital – some of the companies they invested in are Instagram, Zillow, Zipcar, Yelp, Demandforce, and Proofpoint
- Union Square Ventures – some of the companies they invested in are 10gen, Codecademy,Disqus, Etsy, Hashable, Heyzap, Meetup, Soundcloud, Tumblr, Twitter, Twillo, Delicious, Feedbruner, Indeed, and Zynga
- General Catalyst Partners – some of the companies they invested in are BigFish Games, C12 Energy, Fancy, Game Logic, Hubspot, Kayak, Lose it, and Plum District
- NEA– some of the companies they invested in are Add This, Advertising.com, Box, Brain Tree, Career Builder, Diapers.com, Glu, Groupon, Loopt, Pulse, The Learning Company, Tivo, and WebMD
- Kleiner Perkins – some of the companies they invested in are Flipboard, Groupon, Karma, Lockerz, Path, Shazam, Shop Kick, Spotfy, Twitter, and Zynga
- Khosla Ventures – they invest in categories such as cleantech, bio-refineries for energy and bioplastics, solar, wind, battery, engines, LED, HVAC efficiency and other environmentally friendly technologies
- Greylock – some of the companies they invested in are Dropbox, Facebook, Edmodo, Instagram, Linkedin, Pandora, Tumblr, and Wild Tangent
VC firms are focusing largely on the seed and late stage of start-ups Categories of mobile and social sectors, health care, and even telecom are big right now. Clean Tech has a huge opportunity, however as several VCs and even President Barack Obama has stated, there’s a lot of science that needs to be developed, tons of financing, and a lot more government cooperation and subsidies than the US currently has to invest. All in all, business is still booming. VC’s are focusing on where there is a need and that is technology and healthcare.