More Misleading Venture Capital Numbers
from the does-it-really-matter dept
It seems like every week there’s a new study coming out showing just how little venture capitalists are investing these days. The latest such study is doubly misleading. First, it indicates that VCs only raised $1.9 billion last year, the lowest amount since 1981. This isn’t exactly true. They actually raised $6.9 billion, but other VCs gave back $5 billion, leading to a net number of $1.9 billion. Still, $6.9 billion was raised – and in some sense this was really just a shifting of VC money from VCs who couldn’t handle the amount they had to those who (hopefully) could. Furthermore, looking at how much they raise in a single year isn’t necessarily indicative of how much they’ll invest. These funds can last a while and looking specifically at how much the VCs raised indicates little, if anything, about the current climate.
