
Funding Conditions for Tech Startups Soar to a New Record - adventured
https://www.bloomberg.com/news/articles/2017-08-11/funding-conditions-for-tech-startups-soar-to-a-new-record
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austenallred
Nine days ago we were talking about how seed funding had slowed in Silicon
Valley
[https://news.ycombinator.com/item?id=14908581](https://news.ycombinator.com/item?id=14908581).

It's almost as if taking a small number of data points and extrapolating them
you can make the case for any narrative you'd like.

~~~
heurist
VCs seem to be making a greater effort to fund startups outside the valley
these days. Could explain the discrepancy.

~~~
FiatLuxDave
Could you provide any more information about this trend, and how they are
making a greater effort?

~~~
heurist
Honestly I haven't done any analysis of this, just going off a gut feel. When
I look at this data my claim seems to not be true:

[http://ssti.org/blog/useful-stats-share-us-venture-
capital-a...](http://ssti.org/blog/useful-stats-share-us-venture-capital-
activity-and-capita-investment-state-2010-2016)

But there are programs like Google Demo Day and Rise of the Rest that are
reaching beyond SV for value. Several accelerators trying to copy the YC model
have emerged across the US - in Atlanta, Chicago, Austin, Detroit, Raleigh-
Durham, Boulder, etc.

[https://events.withgoogle.com/demoday/siliconvalley/](https://events.withgoogle.com/demoday/siliconvalley/)

[https://www.riseofrest.com/](https://www.riseofrest.com/)

The other day Capital Factory in Austin announced they are kicking off a
program pulling Austin, Dallas, Houston, and San Antonio under one big startup
umbrella:

[https://austinstartups.com/the-texas-startup-
manifesto-42f06...](https://austinstartups.com/the-texas-startup-
manifesto-42f06f2a7075)

Without digging more I don't have much else to say on this :)

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btown
TL;DR "The total amount of money that startups have raised is still down from
a year earlier, albeit by less than recent weeks. There were a few outsized
deals last summer that caused this sub-index to spike. More worrying is the
slump in the number of companies that get acquired or file for initial public
offerings."

So it's a concentration of investment in likely winners. Unless you have some
unique edge (i.e. you're B2B in an untapped niche with a near-guaranteed path
to profitability and an extensive client list waiting in the wings) it might
not be the best time to quit your day job.

And I expect better from Bloomberg when it comes to clickbait.

~~~
adventured
> So it's a concentration of investment in likely winners.

It's not clear that's what is occurring now. I think you're confused by the
outsized deals reference about last Summer - they're not saying that's what is
causing the index to spike now; they're saying it's what caused the spike last
Summer, such that comparing today vs a year ago should come with a flag about
that data.

~~~
btown
Huh, you may be right. The notion that the index is ever susceptible to large
one-off deals, though, still makes it suspect as an indicator of the general
health of the tech startup industry. Similar to how high customer
concentration can cause the valuation of a business to be lower than an
unconcentrated customer base with similar revenue.

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suresh70
Funding may give you the energy to take-off your entrepreneurial journey.. But
it is your vision and business model that will help you stay up float and soar
high. Rounds and Rounds of fund will not only make you dependent on more
rounds but will divert your focus to money-making rather on solving problems.

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edoceo
Anecdotally : three years ago very little interest in my startup. now we've
been in the black almost the whole time and are opening our first round. Was
told I HAD to do a SAFE or Convertible but are shopping a priced seed round
w/o a 409a and have interest over our goal.

Some of these other "fails" have been nothing but a blessing when you already
have revenue and a solid growth history and projection.

Basically not huge but still a 5x bet and raising is/was easier than my
previous company

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rb808
I'm a bit surprised by this given the IPOs of Snap and Blue Apron. Interest
rates are going up and QE is about to start reversing.

Can anyone confirm lots of funding is still around?

~~~
lkrubner
Speculation: My guess is this is being driven by the slowdown in China, and
the very low price of petroleum. Startup funding, circa 2008-2015, was helped
by the sluggish Western economies, the 1% interest rates, and the desperation
investors had for yield. That era is over. But sluggishness in China is
causing Chinese investors to look overseas, and they too are looking for
yield. And also, it probably helps that oil prices are so low, as that both
helps Western economies and also leaves all of the investors in the oil
countries looking to invest in something other than oil. (In 2008, the price
of oil briefly peaked at more than $140 a barrel. In recent years it has not
gone above $50 a barrel for any sustained period of time.)

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ladon86
I also find this surprising - in fact I had to scroll up to check it wasn’t
from 2013!

Would love to hear views from anyone with a seed stage startup.

~~~
hartator
PM if you need some seed money.

~~~
austenallred
Do I have to take a phone call? If so, never mind.

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persaples
Here is where the tech startup fundings are happening, new report

[https://www.fundz.net/startup-funding](https://www.fundz.net/startup-funding)

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killjoywashere
Do VC guys go after big government funds, like TSP or CALPERS?

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cyanexttuesday
well interest rates are still low. I'm still in shock the federal reserve
hasnt been raising them more.

