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Interesting Trends and Tips Circular Patterns in Venture Capital and Angel Investing

 


1. In the last decade, the size of the seed rounds remained stagnant and number of offers decreased. Without trained eye, there seems to be more competition for seed dollars. Below the surface, however, startups are for recycling experience founders. The reason the number of transactions has decreased is that the teams are better prepared, are more pronounced financially, have access to better price support, waste less time and resources, use other forms of financing before rounds. seed and swivel or deciding to go out earlier - in the pre-sown phase. (The founders will jump to explore new opportunities).


  • The founding teams are recycled


2. More companies looking for seed rounds already have sales, interest expression and a form of market validation as a result of the circular economy of spirit and entrepreneurial action. Companies looking for seed rounds are more advanced 10 years ago. Founders use other ways to be funded (as they should! Because seed financing is very expensive!), And they also recycle the foundation's experience, co-founding, council and / or to be early employees in previous companies. This creates a circular economy of entrepreneurial experience. Not only serial entrepreneurs, but a large pool of people who experienced startup development (stranded, successful and all inclusive of many roles!).


  • The fund supplier is recycled


3. More investors enter each round and rounds of seed have become more collaborative. More and more small funds, angels and angel groups are co-investments. This means that more eyes evaluate the offers (good), but also bad transactions through because the impact of each agreement in the general portfolio is lower, and the Fomo (the fear of disappearing) can get this signature! Think that Thananos (Ouch).


Tip: Nobody talks about the herd mentality and there will be lessons to learn in the future. Due to the cycling and recycling of the nature of the funding, the first investors are able to digitize early, with lower amounts and, if they want to play in the next rounds, they must enter early and with others: pay to play.


  • The recycling of the founders and donors also changes the outputs:


4. The outputs are recycled too! Companies are acquired, public sockets, broken into pieces, claimed, privatized, re-public, and there are many emerging possibilities of exit. It's actually a mature zone for disturbance. Welcome to the world of recycling outputs.


  • And the funding process has become more interesting and more complex.


5. As entrepreneurs and donors become more comfortable navigating in many funding or adult creatures options, new financing options are emerging: there is better knowledge of crowdfunding, cryptocurrency , hybrids (safes / convertible notes) and SFI types (can we call these special financing instruments?). Capital providers are SPV, SPE and SVI borrowing mechanisms. I can not wait to see what new options grow from that.


Overall, a combination of healthy talent, capital and technology recycling feeds the economy despite policy errors.


For investors, signals are clear: Start early, support many startups, learn and collaborate.


For entrepreneurs, signals indicate: use many forms of funding, use dynamic financing, ask for support investors (not just money) and create dynamic teams.


Oh, and for the owners of small businesses who think that "small is beautiful", now more than ever, my famous 100% quote of 1 is 1, but 1% of 1000 is more, is more valid than ever. Getting to line, ditch the illusion of a "safe" and embraces the "growth" mentality. If we stop growing, we start dying. Small is beautiful, it's just not lasting.


For government and economic development agencies, the puzzle becomes more and more complex ... Hang on!


Source by Alicia Castillo

IanM
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