 "After belt tightening, venture capitalists see more promise in 2017")
Investors who once poured money into the nation’s start-ups with abandon began to tighten their belts this year.
The amount of money that flowed into start-ups in the United States fell in 2016 for the first time in four years as the number of deals struck tumbled to their lowest levels since 2011.
But the technology world has high hopes that 2017 will prove to be brighter, as the parent company of Snapchat and other highfliers prepare to go public and venture capitalists amass huge new war chests. About $67.8 billion was invested in start-ups in 2016, according to data from PitchBook, down 15 per cent from last year.
Much of 2016 proved to be a less ebullient time for the once red-hot start-up market.
In years past, investors and the industry press alike delighted in anointing new “unicorns,” the once-ballyhooed term for a start-up valued at more than $1 billion.
This year instead brought a healthy skepticism — while the apocalypse hasn’t arrived, leaner times are ahead. Start-ups have tightened their belts, laying off staff and focusing more on reaching profitability rather than skyrocketing user growth.
Just 12 companies joined the unicorn club, according to the data provider CB Insights, a 70 per cent drop from 2015. And initial public offerings — one of the primary ways that investors in start-ups can harvest their gains — tumbled sharply during 2016 amid uncertainty and tumult in the stock market.
Just 105 offerings priced during the year, according to data from Renaissance Capital, down 38 per cent from 2015.
©2016 The New York Times News Service
The amount of money that flowed into start-ups in the United States fell in 2016 for the first time in four years as the number of deals struck tumbled to their lowest levels since 2011.
But the technology world has high hopes that 2017 will prove to be brighter, as the parent company of Snapchat and other highfliers prepare to go public and venture capitalists amass huge new war chests. About $67.8 billion was invested in start-ups in 2016, according to data from PitchBook, down 15 per cent from last year.
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And just 7,841 deals were struck, down 25 per cent from the period a year ago.
Much of 2016 proved to be a less ebullient time for the once red-hot start-up market.
In years past, investors and the industry press alike delighted in anointing new “unicorns,” the once-ballyhooed term for a start-up valued at more than $1 billion.
This year instead brought a healthy skepticism — while the apocalypse hasn’t arrived, leaner times are ahead. Start-ups have tightened their belts, laying off staff and focusing more on reaching profitability rather than skyrocketing user growth.
Just 12 companies joined the unicorn club, according to the data provider CB Insights, a 70 per cent drop from 2015. And initial public offerings — one of the primary ways that investors in start-ups can harvest their gains — tumbled sharply during 2016 amid uncertainty and tumult in the stock market.
Just 105 offerings priced during the year, according to data from Renaissance Capital, down 38 per cent from 2015.
©2016 The New York Times News Service