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The current condition of venture capital

Prospective entrepreneurs in Colorado who are seeking business financing may consider using venture capital. They may benefit from learning a few facts about the state of venture capital.

According to PitchBook-Venture Monitor, the last time the number of companies that have received venture capital funding was as low as it is now was in 2011. This is despite the slight jump in the amount of investment funds in the first quarter of 2017 compared to the last three months of 2016.

While some may examine the recent numbers and assume that the industry is losing ground, the founder of Pitchbook believes they show that entrepreneurs and investors have begun to be more methodical when it comes to investing. They are being more cautious in the market and careful to make deals that have fair terms for both parties.

In the first three months of 2017, 1,797 companies received $16.5 billion from venture capitalists. There were 1,223 angel and seed investment deals that were completed in the first quarter of 2016 while only 827 deals were recorded for the first quarter of 2017. The software and life sciences industries were the two areas that received the largest amounts of investments. In the first quarter of 2017, the two industries had 930 completed deals.

Companies located in the District of Columbia and 46 states received funding from venture capitalists. A total of 560 California companies received $8.3 billion, half of the capital that was distributed in the first three months of 2017.

Entrepreneurs may need the services of an attorney who practices business and commercial law. The attorney may advise of legal complications, such as those pertaining to securities regulations, that could arise from certain business ventures. Additional services may include assistance with creating business plans or negotiating contract terms with angel investors.

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