A stats-based look behind the venture capital curtain by Eric Feng

TL;DR - There are many more investors now than a few years ago, particularly at the seed stage. However, the overall accuracy rate of investors has decreased from 15% to 10% because significantly more companies are being invested in.

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Tags - Stats, VC, seed funding, history of investment, investment trends

Questions answered:

  • What has changed in the VC industry from a decade ago?
  • Why are people funding more companies at seed stage?

Summary:

  • There are now a lot more investors in VC than 10 years ago
  • From 2003 to 2011, an average of 157 new funds were raised each year. But from 2012 onward, that average rose to 223, or an impressive 42% increase.
  • The rate of non-seed funds raised each year has been relatively stable for the past 15 years at about 90. But the rate of seed funds raised has jumped dramatically
  • In the past 15 years, the amount of money invested by US-based VC firms into startups grew more than 4x to almost $85 billion dollars last year.
  • venture and growth-stage deals (i.e. non seed deals) have accounted for over 90% of the capital and that ratio has been consistent over the past decade
  • Total number of exits (startups going public or getting acquired) are up 2x in the past 15 years
  • Return on investment is roughly the same now as it was 15 years ago despite having about 3x as much money in the system.

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