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This morning, the research firm CB Insights<\/a>, in partnership with the services firm PwC<\/a>, released a report on the state of VC in the first quarter of this year. It does a great job of breaking down what\u2019s what, so we\u2019re basically just cutting and pasting a handful of its\u00a0biggest takeaways here and adding a little bit of context\u00a0in case it\u2019s helpful.<\/p>\n 1.) U.S.-based venture backed companies raised $13.9 billion in the first quarter, across 1,104 deals. That\u2019s up 15 percent and 2 percent from the first quarter of 2016 but way below the amount of activity we saw in 2015. (VCs invested more than $20 billion in the second quarter of 2015, for example.) This is a narrative we\u2019ve been watching since early 2016, when an abrupt\u00a0nosedive<\/a> in the share price of LinkedIn (months before its acquisition<\/a>) launched what would become a\u00a0sustained freakout by both public and private investors.<\/p>\n 2.) This one surprised us, but seed activity as a proportion of all deals is on the decline. Seed rounds made up one quarter of all deals in the first quarter; over the last few\u00a0years, that figure has been north of 30 percent. We\u2019re not immediately sure of how to explain this one, but it\u2019s likely that angel investors are still waiting for some of their older deals to exit. (These things typically\u00a0take far longer than newer angels in particular appreciate.) There could also be a growing disconnect<\/a> between the prices founders are asking for and what angel investors are willing to pay.\u00a0The most optimistic scenario is that angels have grown more discerning about what to fund. (Just kidding. That probably isn\u2019t happening.)<\/p>\n 3.)\u00a0Corporates and corporate VCs are as active as ever, participating in 26 percent of all U.S. deals in the first quarter, which matches their rate of participation in the third quarter of last year, which itself was an eight-quarter high. This one won\u2019t surprise industry observers. When even Sesame Street launches a venture fund<\/a> . . .<\/p>\n 4.) Healthcare\u00a0is on the rise, with a growing number<\/a> of VCs enamored<\/a> of the broader sector, meaning biotech and medical devices and other related equipment.\u00a0Indeed, according to this new report,\u00a0healthcare represented 17 percent of all deals in the first quarter, a two-year high. Interestingly, digital health specifically slid 23 percent, though a huge round<\/a> by the blood testing startup Grail propped up the quarterly dollar amount of capital invested.\u00a0We\u2019re not sure why more money didn\u2019t flow to\u00a0biotech startups that are looking to\u00a0improve on\u00a0everything from\u00a0cancer screening<\/a> to understanding the human microbiome via AI. Possibly\u00a0investors are taking a deep breath, having\u00a0already<\/a>\u00a0funded a lot of startups that are still testing out their hypotheses.<\/p>\n 5.) International investors have shown up in a big way. Whether they\u2019re here to stay is an open question, but international sources of capital represented 25 percent\u00a0of investors in later-stage deals\u00a0in U.S. companies in the first quarter, says this new report. The reason, we\u2019d guess:\u00a0While overzealous U.S. investors have grown\u00a0weary of some of these unicorn companies \u2014 including the hedge funds and mutual funds that have largely backed off over the last 12 months or so \u2014 \u00a0foreign investors, with not a lot of better options<\/a> to park their capital, see opportunity. This is especially true as\u00a0valuations for some of these privately held giants start to slip<\/a> a bit.<\/p>\n You can check out the full report here<\/a>; it has a much more granular information that you might find interesting.<\/p>\n Featured Image: Jason Costanza<\/a>\/Flickr<\/a> UNDER A CC BY 2.0<\/a> LICENSE (IMAGE HAS BEEN MODIFIED)<\/small><\/p>\n","protected":false},"excerpt":{"rendered":"![\"cash](\"https:\/\/tctechcrunch2011.files.wordpress.com\/2014\/12\/screen-shot-2014-12-01-at-5-05-25-pm.png?w=680\")
This morning, the research firm CB Insights, in partnership with the services firm PwC, released a report on the state of VC in the first quarter of this year. It does a great job of breaking down what’s what, so we’re basically just cutting and pasting a handful of its\u00a0biggest takeaways here and adding a little bit of context\u00a0in case it’s helpful. 1.) U.S.-based venture… Read More<\/a><\/p>\n\n<\/img><\/a>
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