The 2008 global financial crisis accelerated the existing trend toward a more technology-based economy. This led to a large number of startups and a new generation of entrepreneurs and investors. The democratization of venture capital was pushed even further. The pandemic had a dramatic impact on the economy and markets. More people are interested in investing in technology, and entrepreneurship is booming. The future venture capital will become more accessible to entrepreneurs.
The future of venture capital investment will be very different from what we’ve seen so far.
Changed market dynamics
Companies take on more debt and have higher costs when they go public. To give you an idea of how much the cost of going public has fallen, look at the inflation-adjusted valuation of companies that went public in the S&P 500 between 1997 and 2007. The average company went public in 1997 with a valuation of $2.3 billion. In 2007, the average valuation was $6.7 billion. Going public involves significant costs and hurdles. Companies typically wait until they are more mature and thoroughly prepared before incurring the costs and regulations of going public.
Twenty years later, however, companies are going public with valuations far above those at which they were valued in their private form. Twenty years ago, companies went public with a valuation of $500 million. Today, companies with $500 million valuations are classified as growth companies. Large companies like Uber and Airbnb are now worth billions of dollars, between $20 billion and $50 billion.
Innovation and access to technology are important drivers of the future venture capital
With the advent of technology, the notion that startups only go public to put valuations in perspective has evaporated. As a result, more and more value is being created in the time it takes a company to raise capital. At DueDash, we offer investors a curated approach to diversify their portfolios. In summary, the only companies that will receive venture capital in the future are those that can demonstrate that their value creation opportunities are where they innovate and deliver products and services to customers. Investors will not wait for an IPO because direct investment in early-stage startups offers a lot of value.
We see that industry is changing as more accredited individual investors are entering the marketplace. DueDash’s investment platform lowers this barrier to enter for private companies by making it easier to raise money through an angel or through VC. At the same time for accredited individual investors who want to enter this space find DueDash a great provider. Now private companies can get funding from any accredited investor at any time by simply creating an account with DueDash.
Change herald’s in exciting times ahead
The world of venture capital has always been an exciting and ever-changing environment. The emergence of new technologies and the constant proliferation of markets have led to a surge of innovation and change in the sector. The future of venture capital investment is not an endless cycle of expectations and frustration. The industry VC has come a long way in terms of accessibility, and at DueDash we believe that greater transparency and technology
At DueDash, we believe that the private capital industry is at a crossroads where the proliferation of startups and investment by venture capitalists has dramatically changed and democratized. In a world of disruption, VCs are no longer limited to a handful of successful centers of entrepreneurial activity. New ecosystems have formed around the world, leading to a surge in innovation. VC Investments are spreading elsewhere in the world with greater speed. This is due to the development of entrepreneurial ecosystems that are emerging wherever there is affordable technology, far-flung talent, and receptive investors.
Future will be defined by entrepreneurs
The future of venture capital is in the hands of intrepid entrepreneurs and those who support them. The role of venture capitalists has evolved from early-stage funding to early-stage mentoring and eventually to a place where entrepreneurs can find funding on their own. The best companies are being created all over the world, and startups need VCs to grow.
Today, more investors have greater access to venture capital, and not just locally. They can participate in the global venture economy. This is the future of venture capital investing. Coupled with global reach, companies funded by VCs are thriving. Venture capitalists are funding startups in locations around the world. This is a time when there are more venture capital deals from more sectors, accelerated by social trends. These trends include: more investors having access to venture capital; more global opportunities for startups; and an overall shift to the startup space.
One result of this trend is that it is easier than ever for people who want to invest in companies to do so. Bigger opportunities are on the way. In an increasingly globalized economy, it’s easier than ever for investors to participate in the growth of innovative startups that have high potential for equity investments and multi-million dollar exits. From a geographic perspective, the growth of investment opportunities in emerging and underrepresented markets is accelerating.
Startups will increasingly raise capital from individuals in the communities they serve, using new fintech developed by Angelist, DueDash and such disruptive platforms. .More and more use of data in decision making will take place which will help in speeding up the process from first initial contact to term sheet. It may lead to less capital may be needed to get to a Series A and overall lesser rounds of fundraising which will result in less early stage failures With more small seed checks without severe terms on early stage like to earn right to lead future rounds. Many VC funds may not “close” as we see new trend of rolling funds on a rise. Likely VC FOFs will become commonplace. We believe that venture investing will shift to a mainstream asset class.