The State of Venture Capital
If you look at how much VC firms have raised from Limited Partners (LPs) over the past 2 decades you’ll see that we’ve returned to a level that we haven’t seen since 1999, which leaves many crying "tech bubble."
This week Mark Suster published a deep dive into the state of VC and why, in his perspective, we are NOT in a tech bubble. I would have to agree.
Read the full post here, but the two most interesting points in my opinion are:
Companies are staying private longer, and raising rounds far greater than the IPO proceeds of yesteryear. The “traditional VC” market has only grown 14% per year and mega-rounds ($100M+) now account for nearly half of the dollars in the industry. This means that value hasn't been inflated but rather shifted from the public to private markets.
2019 is not 1999, the internet is exponentially more mature. In 1999 the US VC industry raised $53 billion for a nascent internet population. 20 years later, we have 77% of the US and 56% of the world online with $55 billion raised. Not to mention, people are exponentially more connected in 2019. New ideas and companies can spread like wild fire.