Colorado entrepreneurs and others who are looking for venture capital may be able to get it from Sony. The conglomerate corporation has created a $100 million pool called the Sony Innovation Fund. This fund, which was created in 2016, has invested in roughly 25 early stage technology companies in the United States, Europe and Japan. On average, those companies have received millions of dollars each from the fund.
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.
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.
Venture capital investment in 2017 reached levels not seen since the dot-com boom that occurred more than 15 years ago. Entrepreneurs in Colorado may be interested to learn that some $84 billion was provided to more than 8,000 business ventures behind a variety of products and services. Sources of funding included angel investors, seed capital specialists and firms specializing in high-risk business ventures.
In a world that is moving towards gender equality, numerous beacons pop up in Colorado and elsewhere throughout the country to help light the way forward. A case in point is a San Francisco woman who is an angel investor thriving in an industry that is male-dominated. For context, 7.4% of angel investors are female, and this imbalance affects who ends up being funded. Consequently, this woman strives to level the playing field and offer female entrepreneurs the same opportunities afforded to their male counterparts.
Colorado startup business owners may be interested in knowing that 75 of the Fortune 100 companies provide some sort of corporate venture capital (CVC). However, these companies will not invest in just any startup. To improve the odds of securing an investment, a startup will strive to have as much diversity as possible in its team of founders. This is because that team will have a variety of backgrounds and skills from which to pull.
Starting a business in Colorado or anywhere else in the country takes money. Everything from paying workers to buying equipment requires capital. While venture capital may be an option for new startups, it's not the best choice for all companies. In some cases, venture capital won't meet all of a new company's funding needs.
Colorado residents that want to be entrepreneurs should know that it takes a lot of effort and preparation to start a business. Understanding the process that starting a brand-new enterprise entails can help aspiring entrepreneurs to avoid common pitfalls.
Venture capital is a prime, competitive source of financing for new businesses. Investors in Colorado as well as entrepreneurs who are seeking financing for their startups should be aware of the trends that are shaping the venture capital industry.
Many Colorado residents are aware that it's never been tougher to operate as a venture capitalist firm. Lots of new opportunity seekers means more competition in chasing good ideas, and the ever-increasing difficulties are widely apparent to both new and veteran investors.