After a rough patch for Startups in the past few years, Angel Investors & Venture Capitalists now see hopeful signs for more Funding in 2017.
Topics: excessive CA$H, Favorable Govt Policies, Stock Market is booming, Even Non-Tech co’s are interested in Startups, Finding Funding Quotes.Technology startups have faced a tough climate over the last year. The Bloomberg USA Startups Barometer (a weekly gauge that tracks both the Funding flowing into private tech companies – as well as the exits that make their investors money), is now near its lowest level since 2014. But venture capitalists are optimistic that things will turn around this year in Finding Funding. Here’s why.
1. Venture Capital [VC] firms have accumulated excessive CA$H. Venture Capital firms raised $41.6 Billion in 2016, the most since since 2001, according to research firm PitchBook Data & the National Venture Capital Association. With that amount of Cash looking for opportunities, there’s a good chance it will be put to use in the near future.
2. Investors expect more IPOs this year. Last year was a particularly slow one for Initial Public Offerings [IPOs] – as well as acquisitions within the tech industry. It’s not surprising that investors expect 2017 will be better. The hope is that successful IPOs from some of the largest startups such as like Snap Inc. (which filed publicly last week for an initial share sale), will encourage smaller companies that have been on the fence to go public as well.
IPOs up. Most bankers are predicting 30 to 40 IPOs, and that’s up substantially over 2016. A lot of companies think it’s a good time to go public, and a lot of companies have the ability to go public.
But the industry got a bit of a shock when AppDynamics, which was expected to be a trendsetter for the year’s tech IPOs, announced a surprise sale to Cisco [Networking Hardware] the day before it was supposed to price its shares.
3. Favorable Government Policies could free-up CA$H at big Tech companies. President Trump has suggested cutting taxes on companies’ accumulated offshore earnings to persuade them to bring back that money to the U.S. If his re-patriation plan goes into effect, many companies may start making use of their overseas profits — not just to build factories & create jobs, as Trump has intended, but also to fund domestic investments. “If that happens, I would assume there’s going to be a ton of Merger & Acquisitions [M&A],” said Marvin Liao, a partner at 500 Startups. “There’s a very good chance of that happening under his administration.”
4. The Stock Market is booming at 20K. On 25 Jan 17, the Dow Jones Industrial Average cracked 20,000 barrier – for the very first time. Public companies, “seeing their stock price go up, are more emboldened to acquire smaller companies.
5. Even Non-Tech companies are interested in Startups. It’s not just the tech giants like Apple, Google, Amazon & Facebook that are interested in startups. There’s a new batch of buyers in industries like retail that are looking to acquire the talent, the strategies and the customer base that their smaller rivals have developed. There’s been a big rush of non-tech huge companies – active in private tech markets as of late, like to acquire high-tech Startups (ie, Walmart & Jet.com, Unilever & Dollar Shave Club, Under Armour & MyFitnessPal)
Conclusion: For huge, established companies, spending a few million $$$ billion dollars to acquire a tech business is a small price to pay to mitigate the threats that these startups pose to their core business.
Finding Funding & other Startup Quotes
“It’s almost always harder to Find Funding than you thought it would be, and it always takes longer, more energy & frustration. So plan for that.” –Richard Harroch, Venture Capitalist &Author
“Get big quietly, so you don’t tip off potential competitors.” – Chris Dixon, Angel Investor
“Stay self-funded as long as possible and you’ll get more creative.” – Garrett Camp, founder of Expa, Uber & StumbleUpon
“Timing, perseverance, a little $$$ & 10 years of trying, will eventually make you look like an overnight success.” – Biz Stone, Twitter co-founder
“Embrace what you don’t know, especially in the beginning, because what you don’t know can become your greatest asset. It ensures that you will absolutely be doing things different from everybody else.” – Sara Blakely, SPANX founder.
“What do you need to start a business? Three simple things: 1) know your Product better than anyone. 2) know your Customer, & 3) have a burning desire to succeed.” – Dave Thomas, Founder, Wendy’s
“Don’t limit yourself. Many people limit themselves to what they think they can do. You can go as far as your mind lets you. What you ‘believe’, remember, you can ‘achieve’.” – Mary Kay Ash, Cosmetics founder
“When you start a company, you get an idea, then you jump off a cliff (take a big risk) and pack your para-chute on the way down, so you make decent landing (survive) and maybe even look good.” – Reid Hoffman, LinkedIn co-founder
“If you’re not a risk taker, you should get the hell out of business.” -Ray Kroc, McDonald’s founder [Learn how Ray succeded in The Founder movie]
“When you find an idea that you just can’t stop thinking about, that’s the best idea to pursue and see if it’s feasible.” – Josh James, Omniture CEO & co-founder
Comment: Are there any reasons you feel bullish for 2017?from Bloomberg.com 07 Feb 17 enhanced by Peter/CXO Wiz4biz For more Info, click on Finding Funding. Pitching Investors.