In the third installment from my chat with Caroline Fairchild, LinkedIn’s New Economy Editor, we discuss the current funding environment and what I think it will look like six months from now.
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Caroline: There’s a lot of talk right now of a slowdown in VC funding, yet firms are raising more money than ever. What’s your take on this trend?
Jeremy: The past few years were anomalous as we saw a lot of funding for startups coming from non-traditional sources, including many individual investors, mutual funds, PE firms, family offices and sovereign wealth funds. Many of these sources of capital have since left the market.
Tiger Global is a great example; they invested heavily over the last few years, but their pace has slowed significantly recently both for new investments and even for some of their existing portfolio. This leaves the professional venture capitalists continuing to fund and support startups, as has always been the case.
It turns out that funding and nurturing early stage companies is harder than it looks! The tourists have gone home.
Caroline: What do you think we can expect to see in the VC funding market in the next six months?
Jeremy: The next couple of years will look like a normalized financing environment, like say 1993 to 1997 or 2005 to 2012. Great companies will continue to get financed.
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This post originally appeared on LinkedIn’s Pulse publication on May 22nd, 2016: https://www.linkedin.com/pulse/snapchats-first-investor-slowdown-funding-tourists-have-fairchild. Image credit Booming.com.
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