Venture capital firms are raising billions of dollars to put into companies in Colorado and elsewhere. For example, SoftBank has a $100 billion fund and placed $7 billion into Uber alone. Sequoia Capital is looking to raise as much as $12 billion for its global growth fund as well as funds in the United States and China. It is believed that Sequoia is trying to position itself as an alternative to SoftBank for business owners.
While the larger funds may allow companies to stay private for a longer period of time, they may also be creating an elite subset of businesses. This may impact how venture capitalists think about investing in new companies because there may be pressure for a startup to reach this level to justify an investment. In some cases, companies that have hundreds of millions of dollars in funding may not be able to compete.
For instance, WeWork just purchased Conductor, which is a content marketing company that was valued for its roster of large clients. This came as WeWork competitor Industrious raised $80 million in venture capital to increase its own roster of clients. Despite its $142 million in venture funds, Industrious is nowhere near as well funded as WeWork that has attracted $6.9 billion in venture capital.
New business ventures have generally relied on venture capital or other outside funding to grown and thrive. However, startups may need to do their research into an investor or investment firm prior to signing a deal. An attorney may be able to review the term of an investment deal to ensure that a startup founder understands the implications of doing so. In some cases, an attorney may work to change any terms that aren’t to a founder’s liking.