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What transpired in venture capital in 2017

Entrepreneurs in Colorado and throughout the country often rely on venture capital to help their companies succeed. In 2017, business owners received $84.2 billion in funding from venture capital firms according to the National Venture Capital Association and Pitchbook. However, there were fewer deals done as the tech industry is going through a period of contraction. This is partially because the median age of companies seeking capital has increased since 2013. The median age of companies seeking Series A funding is about 3.5 years.

Another trend in 2017 saw venture capital firms investing more money into unicorns. A unicorn is a startup company that has a valuation of $1 billion or more. During 2017, unicorn companies were involved in 2 percent of all deals. However, they received more than a fifth of all dollars invested, which translated to more than $19 billion.

As there were fewer deals completed in 2017, those that were completed tended to be for higher dollar amounts. There were 24 companies that managed to raise $100 million or more in venture funds that year. The data also shows that venture capital is being sought and received in multiple states as opposed to being concentrated in certain geographic areas.

In most cases, companies need a consistent source of funding to grow and meet their goals. Typical funding sources may include venture capital, seed capital or money provided by angel or other types of investors. An attorney who has experience with these types of transactions can be a valuable ally when it is time to review the terms of the proposed investment documents.

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